President Poroshenko predicted to Bloomberg TV that Ukraine will unfreeze its $17.5 billion IMF bailout loan by April. Asserting that Ukraine has “already fulfilled 80 percent” of its commitments, Poroshenko said: “Probably, ‘fingers crossed,’ before April we will have a mission and have the next tranche.” He intimated that his government would raise gas prices toward market levels in the spring, when the heating season is over. Interviewed in Davos, Switzerland on Thursday, Poroshenko said: “We, my government and my people, are ready to continue cooperation with the IMF." The day before, he had closed door talks with Christine Lagarde, the IMF Managing Director. Timothy Ash comments: “Fully meeting all IMF criteria? Why would you say that? The program had been off track for nine months.”
The National Bank of Ukraine expects to receive about $2 billion in financing from the IMF this year, according to a press release by the central bank. Issued before President Poroshenko’s statement to Bloomberg, the report said that Ukraine’s government also expects to receive loans from the EU and the World Bank.
World Bank President Jim Yong Kim discussed the creation of an independent anti-corruption court with President Poroshenko in Davos. Poroshenko’s press service said: "The interlocutors supported the need to create an independent anti-corruption court in accordance with the Constitution of Ukraine and taking into account the recommendations of the Venice Commission."
The central bank has raised its forecast for 2018 GDP growth to 3.4%, from 3.2%, according to National Bank of Ukraine’s website. As the same time, the bank worsened its 2018 inflation forecast to 8.9%, from 7.3%. Looking further ahead, the bank forecasts that 2019 inflation will be 5.8%, and in 2020 it will slow to 5%.
Addressing foreign investors in Davos, President Poroshenko said that in coming weeks the Rada will approve a law to exempt from taxes profits that are reinvested in Ukraine. Speaking at the Ukraine House, he said: “When you invest in Ukraine, you do not pay taxes.” To protect investors, he said Ukraine’s new National Bureau of Financial Investigations “will be the only analytical service. None of the other law enforcement agencies will even be able to knock on the door of business." Finally, he said Ukraine is “finishing” the process of cleaning “dirty banks” from the financial system.
Ukraine is turning the corner for attracting foreign investors, President Poroshenko told the World Economic Forum in Davos on Thursday. "This is the first time that I have so many requests for a meeting from the top players of the investment market,” said Poroshenko, who has been president for 3.5 years. “This has never happened, so many top investors." According to the National Bank of Ukraine, Ukraine attracted $1.4 billion in foreign investment during the first nine months of 2017, 15% more than during the same period in 2016.
Thursday’s decision to raise the prime rate from 14.5% to 16% will have little impact on the central bank’s determination to liberalize foreign exchange rules, Yakiv Smoliy, acting head of the National Bank of Ukraine, told a monetary briefing Thursday. “The restrictions that we still have today are deterrent to the inflow of foreign direct investment into the Ukrainian economy,” he said. “So we will soon submit a currency law, which is almost ready, to National Council of Reforms. We will bring it to the parliament as a priority."
Switzerland’s new President, Alain Berset, discussed with President Poroshenko in Davos on Thursday the issue of “the return of frozen assets to Ukraine, which were illegally withdrawn by former Ukrainian officials,” an official communique said. Meeting in Davos, Poroshenko thanked Switzerland for mobilizing aid, such as the Geneva-based International Committee for the Red Cross, to help in the Donbas, and for starting a visa-free regime for Ukrainians last year. Switzerland is not a member of the EU. Swiss presidents serve one year terms, starting Jan. 1.
Protecting intellectual property is key to nurturing Ukraine’s innovation and IT industries, Prime Minister Groysman said Thursday at a government meeting in Kyiv. Calling for lower prices charged for registering patents, he said: “A lot of modern solutions in the world have either full participation of the Ukrainian intellect, or partial, and the issue of protection is reaching a very important level."
To renovate Ukraine’s seaports and airports, the government should attract foreign investors through privatization or modern concession contracts, Infrastructure Minister Volodymyr Omelyan told Interfax at Davos. He said: “We want to bring strategic world companies to Ukraine and fully integrate into the world economy.”
The Donbas economic blockade cut Ukraine's industrial production by 4% in 2017 by hampering production of steel, coke, coal, iron ore and electricity, calculates Olena Bilan, chief economist at Dragon Capital. Offsetting this drag, were recoveries in the food industry (+2.7 %), mechanical engineering (+ 7.3%) and chemicals (+ 17%). Overall, industrial production closed the year down 0.1%. For this year, Bilan forecasts that industrial production will grow by 3% and the GDP will grow by 3.3%.
Ukraine’s state railroad intends to rent locomotives from Lithuanian Railways, under a protocol signed in Vilnius by Ukrzaliznytsia Board Chairman Evgeny Kravtsov and his Lithuanian counterpart, Mantas Bartushka. Faced with seasonal shortages of locomotives after summer grain harvests, Ukrzaliznytsia is talking with the railroads of Belarus, Latvia and Kazakhstan about renting locomotives. All five countries have Soviet-era, 1,520mm gauge tracks.
To cut highway deaths, the government is adopting a “500-500-1,000” safety plan. This means building 500 traffic rotaries, 500 security islands, and 1,000 pedestrian crossings. Last year in Ukraine, about 3,000 people were killed in traffic accidents. Unveiling the program Thursday, Prime Minister Groysman said: “When we make good roads and they drive at the speed of airplanes, we get a disaster.” He said higher traffic violation fines would help pay for a national road safety program.
One month after UIA launched daily flights from Kyiv Boryspil to Krakow, Yanair is applying for permission to start regular flights to Krakow from Kyiv Zhuliany and from Odesa. From each Ukrainian city, flights would go four times a week to Krakow, Poland’s second largest city, after Warsaw. LOT Polish has a flight from Odesa to Warsaw.
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