Photo by Ibrahim Boran on Unsplash

This is a curated list of the biggest economic news of Ukraine in the past week.

This past week has been all about prices. Prices, prices, prices. First of all, the inflation has jumped to 10 percent in annual terms as reported by the National Bank of Ukraine. The target inflation rate is 5 percent, which the National Bank of Ukraine does not expect hitting before 2022 at the earliest.

“Solid consumer demand, coupled with increase in production costs (in particular raw materials, energy, and wages), further accelerated the growth in prices for processed foods (to 12.3% yoy),” the report from NBU states: “More specifically, prices for pasta and meat, confectionery, and dairy products continued to grow. The price increase was somewhat curbed by the weaker growth of sunflower oil price in annual terms. However, this has not yet affected the prices of sunflower-oil-based products (margarine and mayonnaise), which kept growing at a faster pace.”

In the real estate market, prices on almost all types of property has been increasing too. This is both for renting and buying. The prices on offices, warehouses and apartments are rising in the biggest cities in Ukraine. During the first half of 2021, the price of office real estate in Kyiv increased by 18.4 percent. Office rent also increased in the capital, though only by 13.3 percent, while office rents actually fell across the country on average.

Booming e-commerce has also sent the prices on warehouses skyrocketing in Lviv, Kyiv and Dnipro where the prices on buying square meters for storage grew by 40 percent in Lviv, 31 in Kyiv and 27 in Dnipro. The same goes for apartment square meters.

Oligarch loses shares

The well-known oligarch and fugitive, Dmytro Firtash, has been having a rough week, as he lost of his minority share of 49 percent in a titanium sponge plant in Zaporizhzhia in the eastern part of Ukraine. The State Property Fund has maintained a 51 percent share. The plan is now to attract investors, who are willing to put in the necessary capital to restore the profitability of the company, that reported 60 million USD in losses in 2019.

Firtash’s company has denied all accusations and have stated, that they intend to bring the case further up the ladder in the justice system.

A solid number

Speaking of the State Property Fund – the fund currently managing all the state-owned companies that are to be sold off and privatized – a number on how many of the state-owned companies that actually makes a profit has now been reached.

Just 24 percent of the state-owned companies are profitable. The rest are not functioning or makes no money. This shows how many of the companies are just a burden on the state budget. But it alls shows the enormous potential waiting to be fulfilled in Ukraine. Out of a total of 3332 companies owned by the state, 1369 are functioning but only 802 makes a profit.

The privatization process is not only important for closing leaks in the state budget – it is also a matter of reducing corruption or rather the possibilities of corruption, because some of these state-owned companies are notorious for being hotbeds for corruption.

Not exactly prices

Prizes, though not exactly prices, have of course also been a part of the news cycle this week, as the Olympic Games in Tokyo, Japan came to an end. During the event, Ukraine  won 19 medals in 12 different sports. 12 of the medals are bronze, 6 are silvers and one is a gold medal. It beats the Ukrainian medal count from the 2016 Olympic Games where Ukraine secured 11 medals. They did get two gold medals in 2016, though, so some would argue that they did not perform as well this year.

International hangouts

The president of Ukraine, Volodymyr Zelensky is going to have a busy August. On the 22nd he is meeting with German chancellor Angela Merkel, and a week after that he will be in Washington DC meeting with US President Joe Biden. Naturally, one of the topics of discussion will be the Nord Stream 2 gas pipeline, which Biden and Merkel agreed about earlier this Summer.

The agreement of letting the project finish was a big hit to Ukraine, who will take enormous financial losses when the gas pipe line is finished. As it is now, Ukraine is the main channel of gas transit for Russian gas going to Europe, but with Nord Stream 2, Ukraine becomes irrelevant in this regard.

Farming is great!

Farming was the most profitable business in Ukraine last year, UBN reports. In total, the agricultural sector netted a 3.4 billion USD profit with 83 percent of the farms being profitable. Exports also rose, UBN reports. Exports are up 10 percent compared to last year, catching up with the loss in exports from 2020.

Land reform is not really kicking in

Also, according to UBN, only 5,552 sales agreements have been approved since the land reform opened the door to buying and selling farmland. The average price is 1,500 USD per hectare. Currently only Ukrainians can buy land, and they are limited to 100 hectares. From 2024, Ukrainian companies can also buy land up to 10,000 hectares. Foreigners will not be allowed to buy land, until it has been approved by a referendum.