Foto: Emil Filtenborg

This is a curated list of all the biggest stories on Ukrainian economy this week.

Despite cities imposing local lockdown restrictions en masse, this week has seen the worst numbers of new cases ever registered in Ukraine. Ever. With over 18,000 new cases on Thursday and around 300 deaths, the past week has again been in the shade of the virus.

But according to the Minister of Health, Maxim Stepanov, the lockdowns in the Red Zones have not stopped the virus. Actually, he expects a new rise in the number of daily cases, as Ukraine Nu wrote earlier this week.

“The situation remains quite tense. We predict a surge in the number of patients and, as a result, the number of hospitalizations within at least the next week or two,” he said, pointing out that there is a delay from introducing new measures until it is visible.

Eleven regions in Ukraine are currently in the red quarantine zone. Only three areas –  Ivano-Frankivsk, Zakarpattia, and Chernivtsi region – are seeing a stabilization of cases.

New survey: Many business owners unhappy about Covid-efforts

Today and yesterday, it was announced that the Ukrainian capital Kyiv would also shut down more than what is currently seen in the red zone city. It will be the toughest shutdown since spring 2020.

The Metro, buses, and trams will only carry workers with special passes, and schools and kindergartens will close. The new rules will make it very hard to get around in Kyiv without your own car or by taxi.

“We have lines of ambulances in front of hospitals. We have no choice. Otherwise, there will be hundreds of deaths every day,” says Vitaliy Klitschko. The public transportation will be shut down from Monday.

In the meantime, the parliament is considering imposing a curfew in Kyiv running from 22.000 until morning.

Zelenskiy fires constitutional judges

The Constitutional Court and the Ukrainian President Volodymyr Zelensky have conflicted with each other for months since the Constitutional Court in 2020 declared the country’s anti-corruption institution NABU unconstitutional. Afterward, the Constitutional Court, led by Oleksandr Tupytsky, also said that the Presidential reforms such as the one reforming the land market would need a review.

Zelensky has since tried to remove the Constitutional Court judges and now seems to have found a controversial way. Yesterday, he annulled former President Viktor Yanukovych’s decrees, appointing Oleksandr Tupytsky and Oleksandr Kasminin to the Constitutional Court.

The decision has enjoyed mix reviews, but overall few tears seems to be cried for the two Yanukovitch-era judges.

Everyone worries

Almost done: NBU management worries the world of finance

While the firing of the judges might be positive. The overall climate surrounding Ukraine right now is uncertainty. First of all, the divide between Ukraine and IMF have been widened even further.

IMF are not very happy about the Ukrainian decision to control the prices of natural gas, as they see it as a step back from instituting a fully functioning market for energy and natural gas.

The relationship between IMF and Ukraine has been strained over the past year. Since Ukraine passed a bank law and a land reform with some success, IMF gave them the first tranche of a 5 billion USD loan.

However, since then, President Volodimir Zelensky and his government have consequently been on a different page than the IMF. Most notably, IMF asked Ukraine to secure the independence of the National Bank of UKraine.

Not long after this demand, the governor of the NBU, Smolii, left his position citing political pressure. But not just coming from anywhere. The pressure was coming from the office of President Zelensky himself.

Since then, the newly appointed governor of NBU has been steadily ushering out the old members of the higher management, leading to an even deeper divide between Ukraine and IMF.

This change in management also has the financing sector worried, Kristian Andersson, the director of SEB in Ukraine, tells Ukraine Nu in an interview.

“Nobody knows what will happen. When we look back to the days of the revolution, the National Bank have been a great exception, a success story all the way up until Smolii left,”

Andersson says.

Old school consumption

A new survey tries to map out the spending habits of Ukrainians. They found that Ukrainians quite literally spends most of their money on consumables – Food, drinks, cigarettes and visiting restaurants account for more than 50 percent of most household budgets.

41 percent of the Ukrainian household budget is spend on groceries – food, milk, eggs, non alcoholic drinks. Utility bills is the second-highest expense around 14% out of the budgets, followed by transportation (8.6%), health care (6.1%), clothes and shoes (4.7%), household goods (3.8%).

Flying season is here

The airline industry has chosen to celebrate the coming of spring with a great deal of optimism, as they are opening flight routes left and right in Ukraine. Ukraine International Airlines will resume flights this week from Kyiv Boryspil to 19 cities worldwide, including Cairo and Instanbul, plus several EU-cities such as Amsterdam, Berlin, Barcelona, and London.

Ryanair has restarted its service to 18 cities from Ukrainian cities such as Kyiv and Odesa. They plan to reopen several new routes in June. Lufthansa is reported to increasing the number of flights to Kyiv, and Wizz Air, SkyUP, and Air Baltic are also opening several new flights between Kyiv and destinations across the EU.

Ukraine needs dirty energy

Ukraine might have a lot to gain from exploiting the sun and wind for energy, but the country will still rely on the dirty thermal plants. That is the conclusion of a lengthy analysis done by Unian.

However, there is still space for Scandinavian companies with the right technology to facilitate the green transition of Ukraine.

Big potential

The President of the European Bank for Reconstruction and Development, EBRD, Odile Renaud-Basso, was recently on a two-day visit to Ukraine. She met with President Volodymyr Zelensky and Prime Minister Denis Shmyhal to discuss how the bank can help Ukraine develop over the next few years.

“Our investments focus on strengthening energy efficiency and energy security, unlocking agricultural and industrial potential, providing quality infrastructure, and strengthening the financial sector. We combine investments with policy engagement in key areas such as administrative reform, transparent procurement, and the rule of law in order to overcome corruption,” Renaud-Basso said.

Tensions in Eastern Ukraine

Tensions are flaring up a long the contact line in Eastern Ukraine as well as at the borders with Russia. Both the spokesperson of Vladimir Putin, Peskov, and the Ukrainian parliament has stated worries of an escalation, though the two entities do not agree on who instigates the escalation.

A large number of Russian troops have been seen close to the Russian borders, and reports of more intensive shelling have been coming in. This has also caught the eye of the Americans.

The U.S. military’s European Command raised its watch level from possible crisis to potential imminent crisis, which is the highest level possible. They are concerned, that the ceasefire from July will be broken.

According to some experts, it is a reaction to Ukraine taking steps to leave the Minsk agreements, while other experts see it as an aggressive move by Russia.

Privatization can begin

The Verkhovna Rada has passed a bill to privatize large state owned companies. The sales were suspended because of the pandemic, but are now on the way again. Six large companies are to be auctioned of according to UBN. Included in the list are Kyiv’s President Hotel, Kyiv Bolshevik Plant, The Odesa Portside Plant and United Mining and Chemical Company.

Full lockdown still possible

Oleksiy Danilov, Secretary of the National Security and Defense Council, told the BBC on Wednesday that a full, nationwide lockdown might still happen. There are no concrete signs of a lockdown.