11:25 AM Tuesday, October 23, 2018 - Monday, December 4
Chinese Vice Premier comes to Kyiv; EU nixes EUR600 million payment; Gov’t Postpones VAT on Equipment Imports; Lviv air traffic jumps 47%
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  • With a Chinese vice premier arriving in Kyiv early this week, Ivan Miroshnichenko, a Rada MP who co-chairs a new Ukrainian-Chinese working subgroup, tells that China could invest $8-12 billion in Ukraine over the next five years. This week, Ma Kai, the Chinese vice premier, comes here largely to take stock of Chinese projects in Ukraine. Last month, Bloomberg ran a lengthy article on Ma’s new economic portfolio, which includes “analyze international and domestic financial situations, address international financial risks.”
  • In advance of the Chinese vice premier’s visit, Nataliya Mykolska, Ukraine’s trade negotiator, outlined in an interview with Xinhua the most promising areas of China-Ukraine cooperation. She cited joint production here of power engineering equipment, electrical appliances, and machine-building. Fresh from leading a trade mission to Beijing last month she told the Chinese news agency: "Currently, it is important for us to increase the supplies of ready-to-eat products to the Chinese market. Among them, we can name dairy products, which are gaining popularity in China, and healthy food products -- fresh and frozen fruit and vegetables."
  • The European Commission is holding back on transferring to Ukraine a third and final tranche of EUR600 million in aid. Stumbling blocks were non-action on four points: lifting the ban on roundwood exports, launching an automatic check on electronic asset declarations, the law on the NBU credit registry, and checking information on beneficial owners of companies. Under the program approved in 2015, Ukraine received EUR1.2 billion out of EUR1.8 billion in the package. EU said it is open to talking about a new program. President Poroshenko told a business group Friday that reform will be becoming increasingly difficult as the 2019 elections approach.
  • EBRD board has approved a loans of EUR160 million to Kharkiv for the extension of it third subway line toward the airport. Paired with co-financing from the European Investment Bank, the investment will extend the ‘green’ line 3.5 km, build depots and two metro stations - Derzhavinskaya and Odesskaya, and buy 85 subway cars. The project aims to increase the annual passenger flow by 25 million people, or 68,000 a day.
  • The EBRD board approved a loan for EUR25 million to agricultural holding Myronivsky Hliboproduct, or MHP, for the construction of a 10 MW biogas plant in the Vinnytsia region. The biogas plant is to use the waste of poultry farms in the Vinnytsia region to produce biogas, which will be used as an alternative energy source. The biogas plant will heat chicken houses, cutting greenhouse gas emissions equivalent to 85.5 thousand tons of carbon dioxide a year. MHP is Ukraine’s largest poultry producer.
  • A EUR 6 million a fund for financing renewable energy in Ukraine is being created by Finland and the Nordic Environment Finance Corporation, NEFCO. To date, NEFCO has funded 150 projects for renewable energy and energy efficiency in Ukraine.
  • State Department spokesperson Heather Nauert says the United States worries that that the construction of Nord Stream 2 and Turkish Stream gas pipelines will undermine Ukraine as a state transiting gas to Europe. Nauert said: “It would advance Russia's goal of undermining Ukraine – that's a particular concern of ours – by ending Ukraine's role as a transit country for Russian gas exports to get to Europe."
  • To boost productivity, government will start on Jan. 1 a 2-year postponement on VAT payments on equipment imports, President Poroshenko promised Friday at a joint meeting of the American Chamber of Commerce and European Business Association. At the same gathering, Prime Minister Groysman promised "a spring of reforms will bring new legislation in the ease of doing business. We will adopt a number of important laws that will allow us to begin the process.”
  • President Poroshenko said the 2-year-old moratorium on checks by state bodies of small and medium-sized businesses will be extended for one more year, through 2018. He said Friday: “The hordes of workers of the controlling bodies, not only the siloviki, are waiting for this moratorium to end. They got tired without work and got hungry for bribes.”
  • Ukrainians are more optimistic about their nation’s economy, according to the latest public opinion poll conducted by International Republican Institute. In a September - October poll, 42% of the 4,500 respondents predicted the economy would improve or stay the same over the next year, compared to 41% who said it would worsen. One year ago, 32% of respondents to the same poll predicted economic improvements, compared to 54% who predicted a worsening.
  • Ukraine’ s exports should grow next year by 10%, Prime Minister Groysman predicts. During the first nine months of 2017, export growth was 18.5%. In real terms, he forecast the country’s exports of goods and services to increase from $50 billion this year to $55 billion next year.
  • Ukraine’s foreign trade deficit grew by 15%, to $5 billion, for the first 10 months of the year, according to National Bank of Ukraine.
  • Ukraine’s milk production continues its decline, on track to hit 10 million tons this year, or 3% below last year, Olha Trofimtseva, the Agriculture Ministry’s deputy minister for European Integration, told the All-Ukrainian Dairy Business Conference. Behind falling milk and butter production, the number of cows in Ukraine gradually shrinks. Currently, about one quarter of all cows are owned by dairies and three quarters by households.
  • Despite gradual declines in milk and butter production Ukraine expect to increase its export of dairy products by 11% this year, to 450,000 tons, Trofimtseva told the All-Ukrainian Dairy Conference. She said her office at the Agriculture ministry is “working very actively to open new markets, such markets as Korea, China. African countries, the Middle East and Middle East are very interesting for us from the point of view of export of dairy products."
  • Ukraine has the second cheapest Internet access in the world, according to a new British survey of 196 countries. Ukraine’s $5.47 average monthly broadband package was narrowly beaten by Iran with a prices of $5.37. Internet was twice as expensive in neighboring Russia and Moldova. According to British consulting firm BDRC Continental and internet provider the price in the US is $66.17; in Canada $54; in Germany $34.2; and in Poland $19.22.
  • Crop production costs rose by 23.4% in Ukraine through October, compared to the same period last year, according to the State Statistics Service. By comparison, inflation is about 14%.
  • As 2018 shapes up as a road building year, Prime Minister announced the reconstruction of two highways: the 530 km road from Kyiv southwest to Chernivtsi, near the Romanian border; and the 190 km Kharkiv-Sumy highway, which runs parallel to the eastern border with Russia.
  • On Saturday, Ukrainian Railways started selling tickets online for international trains to six nearby EU nations: Austria, Czech, Hungary, Poland, Romania and Slovakia. Fares vary according to the Euro exchange rate of the day of purchase.
  • Lviv airport handled its 1 millionth passenger of the year on Friday, reportedly the first time since Independence in 1991 that the airport has handled such a volume. Through October, passenger traffic grew by 46.8%, hitting 918,400 passengers. The number of flights increased by 36.7%, to 10,088. Boosting traffic even more, Ernest Airlines starts next Saturday direct flights from Lviv to Naples and Venice.

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