Ukraine’s Cabinet of Ministers published a report on its activities for 2019. According to the report, the government is just laying the foundation for further reforms in many areas.
The current Cabinet credits itself to ensuring the availability of medicines, improving the quality of education and protecting orphans.
"In order to prevent a decrease in the level of well-being of Ukrainians, we have created conditions for reducing the number of payments for thermal energy, which has already become a reality for a significant part of households," the document reads.
In addition, considerable attention has been paid to ensuring macroeconomic stability, increasing investment attractiveness and improving the business environment.
Dynamics of GDP in Ukraine and the EU countries in the II and III quarters of 2019, as% of the corresponding quarter of the previous year:
So, in 2019, the Ukrainian economy grew at a rapid pace. In Q2 and Q3, GDP growth rates exceeded 4% and were among the highest in Europe.
At the end of 2019, GDP is expected to grow at a level of about 3.3-3.5% (estimates by the Ministry of Economy).
Dynamics of GDP in 2014-2019,%
In 2019, wages continued to grow at a rapid pace. In 2019, the nominal average monthly wage of regular employees increased by 18.4% to UAH 10,497 (430 USD). Real wages increased by 9.8%.
The dynamics of nominal wages in 2018-2019
The growth of the average monthly wage was caused, first of all, by the influence of high competition for skilled labor with foreign employers and the high economic activity of business entities, as well as in the context of an increase in the level of state social standards, in particular, the minimum wage.
The dynamics of real wages in 2018-2019,%
The growth rate of real wage growth in 2019 continued to exceed the growth rate of labor productivity.
Dynamics of labor productivity in 2014-2019, cumulatively in% of the corresponding period of the previous year
In accordance with the increase in the cost of living in 2019, the minimum pension was also increased by 9.4%. The average pension as of January 1, 2020, amounted to UAH 3083 (126 USD), which is 16.5% more compared to January 1, 2019 (UAH 2646 or 108 USD).
Raising the level of pension provision
The increase in income levels of all segments of the population, the growth of economic development indicators contributed to the reduction of poverty indicators. The absolute poverty level (incomes below the actual subsistence minimum) according to the first half of 2019 decreased by 6.2 percentage points and amounted to 25.5% compared to 31.7% in the first half of 2018.
High dynamics of growth in the level of wages, combined with the influence of a further increase in the length of insurance required for retirement, and the continued positive dynamics of economic development contributed to an increase in the supply of labor on the labor market. The level of population participation in the workforce has been growing for the second year in a row.
Dynamics of construction in 2018-2019,%
Positive development trends in 2019 continued in other areas of economic activity, in particular in agriculture and transport.
According to preliminary data from the State Statistics Service, in 2019, agricultural production increased by 1.1%. The growth was recorded both in crop production (by 1.3% versus 10.7% in 2018) and in livestock production (by 0.5% versus 1.5%, respectively).
The dynamics of crop production indicators was formed under conditions of obtaining record volumes of production of grain crops and sunflower against the backdrop of favorable weather conditions for these crops during the growing season, ripening and harvesting.
Dynamics of the value of exports and imports of goods and services in 2018-2019, cumulative % of the corresponding period of the previous year
According to the calculations of the Ministry of Economy and the State Statistics Service, in September-November 2019, compared to the corresponding period of 2018, the positive dynamics of export of goods was accelerated by 4.9% compared to 4.2% in September-November 2018. This happened, in particular, due to the restoration of positive dynamics of export of seeds and fruits of oil plants (by 54.1% against a decrease of 13.4% in September-November 2018) against the background of a record crop of sunflower and fertilizers (32.7 times against a decrease of 91.3%, respectively) in the conditions of resumption of work of Odesa trade factory. At the same time, the growth rate of the export of machine-building products accelerated over this period (up to 4.1% against 2.3% in September-November 2018).
The expansion of domestic demand contributed to the increase in imports of goods and services. The value volumes of imports of goods and services according to the National Bank in 2019 compared with 2018 increased by 7.1% (by 12.8% in 2018), mainly due to an increase in the volume of imports of engineering products (an increase of 21% for aggregated Machines, equipment, vehicles, and devices group versus 17.9% in 2018), including in the context of continuing processes of modernization of production facilities. At the same time, amid falling prices for energy resources, there was a decrease in their value of imports (a 7.3% decrease in the aggregated Mineral Products group versus a 13.5% increase in 2018).
Such export-import dynamics formed a negative balance of trade in goods and services (according to the National Bank) in 2019 at the level of 12,117 million USD (minus 11,367 million USD in 2018).
Despite the fact that overall economic development in 2019 was positive and the expected GDP growth for 2019 is higher than the indicator taken into account in budget calculations for 2019 at 3%, the fiscal year 2019 was full of challenges that the Government faced.
According to the State Treasury Service, the state budget revenues for 2019 amounted to 998.3 billion. UAH (40 billion USD) and increased compared to the corresponding period of 2018 by 7.6%,
At the same time, the decrease was due to VAT on imported goods (230 million USD).
Revenues of the State budget of Ukraine for 2015-2019
Expenditures of the state budget for 2019 amounted to 430 million USD and increased compared to 2018 by 87 billion UAH (3,5 billion USD), or by 8.8%. Excluding debt servicing expenses, the state budget expenditures in 2019 amounted to 953.6 billion UAH (39 billion USD) and increased compared to 2018 by 83.2 billion UAH (3,4 billion USD), or by 9.6%.
The expenditures of the general fund of the state budget for 2019 amounted to 953 billion UAH (39 billion USD) and increased compared to 2018 by 68.8 billion UAH (2,8 billion USD), or 7.8%.
Dynamics of decrease in the value of UAH borrowings depending on the maturity of bonds (as of January 28, 2020)
For the second year in a row, Ukraine is among the countries with the greatest progress in the annual ranking of the Institute of International Finance, evaluating the quality of interaction between sovereign issuers and international portfolio investors and the quality of dissemination of data from developing countries. Ukraine received 40 points out of 42 (3.5 points more than in the previous year) for evaluating practices in investor relations and 36 points out of 44 (4 points more than in 2018) for the openness of data.
According to an operational assessment, public debt at the end of 2019 decreased in relation to GDP to 43.8% (at the end of 2018 it amounted to 52.2% of GDP).
The share of government debt denominated in national currency was increased to 41% compared with 33% at the beginning of the year.
In 2019, Ukraine’s credit ratings were improved: from B- to B (Standard & Poor's) from B to B, and the outlook was improved from stable to positive (Fitch), the outlook was improved from stable to positive (Moody's), from CCC + to B (Rating and Investment Information).
All payments on the repayment of public debt were made on time.
Thus, the general situation that developed in the Ukrainian economy in 2019, despite the persistence of a number of significant problems and risks, indicates the gradual formation of a qualitative basis for further sustainable economic development.
Thus, from the beginning of its activity, the Government has focused on two important areas - the systematic solution of acute Ukrainian problems and the creation of conditions for increasing the competitiveness and investment attractiveness of the Ukrainian economy.