- Retail Grew 8.4% Last Year
- GDP Contracted by 4.4%, Far Less Than Forecast
- Prime Stays Put, Borrowing Costs Drop
- Biden Could Re-Start Ukraine’s Free Market Reforms
- Turkey Builds Big Bridge Over Dnipro
Despite the coronavirus lockdowns, retail trade increased last year by 8.4% yoy in real terms, reports the State Statistic Service. Fastest growth regions were: Kyiv – 19%; Zaporizhia – 16%; and Chernihiv -14%.
Ukraine’s economy contracted by 4.4% in 2020 – far less than the estimates of 6-7% made last May, when the country was still in a severe lockdown, reported the National Bank of Ukraine. Despite a slow start to 2021, the Central Bank forecasts 4.2% growth this year. The 2.5-week lockdown, which ended Monday morning, had only a ‘restrained’ impact on the economy, Dmytro Sologub, Deputy Governor of the bank, told reporters.
The Central Bank board decided to keep Ukraine’s prime interest rate at 6%, the level it reached last June. In the 15 months prior to June 2020, the National Bank of Ukraine cut prime by two thirds, from a recent high of 18%.
Eying inflation, the Central Bank warned that if inflation increases, “the National Bank will raise the discount rate. This will curb the acceleration of inflation in 2021 and return it to 5% in 2022.” The Central Bank forecasts that inflation will rise from last year’s 5% to 7% in 2021. Pushing inflation up during the first half of this year will be: strong consumer demand, higher energy prices, higher wages and carryover food inflation from last year’s worse crop yields.
Average borrowing costs for businesses dropped by 45% over the last year, Kyrylo Shevchenko, Governor of the Central Bank, told reporters. “As for the cost of loans for businesses in the national currency, the rates decreased from 14.8% in December 2019 to 8.2% in December 2020,” he said. “For example, the cost of mortgage loans decreased from 19.6% in December 2019 to 12.1% in December 2020.”
The contract of Petr Krumphanzl, Chairman and CEO of PrivatBank, expired last week. While the Board looks for a successor, leadership of Ukraine’s largest and most profitable bank will go to Anna Samarina, Deputy Board Chair for Finance. During his three years at the helm of PrivatBank, Krumphanzl, a Czech, increased the bank’s profitability and moved strongly into online banking. He also was the target of harassment – legal and physical – by employees of Ihor Kolomoiskiy, who owned the bank until it was nationalized in Dec. 2016.
President Biden should bolster “US support for Ukraine in order to get the country back on the reform track,” Andy Hunder, president of the American Chamber of Commerce in Ukraine, urges in a new essay for the Washington-based Atlantic Council. “Over the next four years, Biden can play an historic role in helping Ukraine eliminate corruption and free itself once and for all from oligarch control,” Hunder writes. Noting that Biden visited Ukraine six times when he was Vice President, Hunder writes: “Throughout this period, he consistently and outspokenly championed the East European nation’s efforts to reform and eradicate corruption.”
“The top priorities of the Biden administration’s Ukraine policy must be to curtail Russian aggression, reduce corruption, and contain the oligarchs…What Ukraine’s shady oligarchs fear most of all is US Justice,” Hunder writes in the piece headlined: “Why Ukraine’s business community has high hopes for the Biden presidency.” He concludes: “The business community is now pinning its hopes on President Biden to back Ukraine during what promises to be a decisive period in the country’s independent history.”
Turkey’s Doğuş İnşaat ve Ticaret A.Ş submitted a winning $402 million bid to win Ukravtodor’s tender build a 1.7 km cable suspension bridge across the Dnipro at Kremenchuk, Poltava oblast, the state highway agency reports. Designed to be the most modern Dnipro bridge within a 500 km radius, the Kremenchuk bridge will have four lanes and approaches suitable for heavy truck traffic moving from cargo the Left Bank to the Black Sea ports. Construction is to start this year and finish in 2024. The city’s current bridge dates back to the Czarist era and was most recently upgraded in 1949. In the 2000s, Doğuş İnşaat took part in the construction of Kyiv’s New Darnytskyi Bridge and Terminal D at Boryspil Airport.
Qatar’s state-owned power development company, Nebras, is buying control of 214 MW of Ukraine solar and wind plants from Vasyl Khmelnytsky and his partners, according to a filing with Ukraine’s Antimonopoly Committee. The sale of these eight operating plants follows the 2019 sale by Khmelnytsky’s UDP Renewables of three solar plants to a Polish unit of Spain’s Acciona Energia Global.
Germany’s shipping giant Hapag-Lloyd AG is launching three container trains from Odesa – to Dnipro, to Kyiv and to Kharkiv. Each ‘block train’ will leave Odesa three times a week with 30-45 containers. A fast-growing segment, container trains grew by 41% last year in Ukraine. Based in Hamburg, Hapag-Lloyd is the world’s fifth largest container carrier in terms of vessel capacity.
Ukrzaliznytsia carried 16 million passengers on long distance trains last year, 30% of the volume of 2019. About 15% of passengers traveled on the elite Intercity and Intercity + high-speed trains, the state railroad reports. For all long-distance trains, the most popular routes last year were: Kyiv – Kharkiv: 712,700 passengers; Kyiv-Lviv – 652,800; Kyiv-Dnipro – 561,800; Kyiv-Vinnytsia – 472,600; and Kyiv-Odesa – 383,500.
Ukraine cut its coal import bill last year by 40% yoy, to $1.7 billion, reports, the State Customs Service. Ukraine cut its volume of imported coal by 22%, to 17 million tons. In dollar terms, the top three suppliers were: Russia – $1 billion, or 62% of the total; US – $480 million, 28%; and Kazakhstan — $126 million, or 7.5%.
After this week’s cold weather, ice breakers started work in Ukraine’s four most affected ports: Bilhorod-Dnistrovs’kyi, Kherson, Mykolaiv and Olvia.
- EBRD Invests $1 billion in Ukraine
- PM Asks for Green Bonds to Settle Solar and Wind Debts
- Ukraine Adapts to EU Green Deal
- Half of Ukrainians Refuse Covid Vaccine
The EBRD invested nearly $1 billion in Ukraine last year, making Ukraine the third largest recipient of funds, after Turkey and Egypt. The development bank makes loans in 38 countries. “We are particularly proud to have increased the volume of our investments in the corporate sector to a record level,” said Matteo Patrone, the bank’s Kyiv-based managing director for the region.
- €450 million loan to Ukravtodor to build highways and support the anti-corruption and procurement reforms
- €63 million loan to Ukrposhta for mobile postal vans and ‘green’ sorting hubs
- Procurement of 400 trolleybuses for 12 cities
- €25 million loan to UkSATSE to help the air traffic control agency survive the Covid collapse of air travel
- €93 million to support small and medium-sized enterprises, or SMEs.
- Loans to a host of Ukrainian companies, including: Novus Group, Fozzy Group, Astarta, Agrofusion, Enzym, Grain Alliance, Kormotech, Nibulon, ArcelorMittal, Galnaftogaz, Scalar, and AllSet.
With unpaid debts to solar and wind power producers tarnishing Ukraine’s investment image, Prime Minister Shmygal instructed his government to prepare ‘green bonds’ to repay the debt. He told the Cabinet: “I ask the Ministry of Energy together with the Ministry of Finance, the Ministry of Economy with the participation of state banks and international financial organizations to work out the possibility of issuing ‘green’ bonds.” By appealing to state banks, the Prime Minister seemed to be calling for local hryvnia bonds, ruling out Eurobonds. ‘Green bonds’ raise money for climate and environmental projects.
Last week, energy regulators decided on a 50:50 split on a $360 million loan from state banks to Ukrenergo, the state power transmission operator. Coming from Ukreximbank, Oschadbank and Ukrgasbank, half of the money goes to pay overdue debts to renewable energy producers and half to Energoatom, the state nuclear power plant operator. For renewables, this $186 million only represents 23% of total overdue debt the government is legally committed to repaying by the end of this year. Since August, Ukrenergo’s tariffs almost doubled, allowing the company to stay almost current on new power purchases from solar and wind companies. However, Ukrenergo still faces repaying about $625 million in unpaid debt from 2020.
Europe’s Green Deal is part of a global trend that Ukraine can only ignore at its peril, acting Energy Ministry Yuriy Vitrenko warned in an essay posted on his ministry‘s website. If Ukraine drags its feet on joining the trend, he writes, it will lose competitiveness and eventually confront barriers to exports to the EU. The European Green Deal calls for cutting greenhouse gas emissions by 22% during the 2020s and making Europe climate neutral by 2050.
President Zelenskiy invited President Biden to Kyiv, a city he visited five times as Vice President. “Watching the inauguration of the new U.S. President,” Ukraine’s President tweeted. “I will be glad to welcome Joe Biden in well-known Kyiv. I am sure our relationship will be enhanced.”
Ukraine wants to be a major producer and supplier of hydrogen to the EU, largely by using its existing east-west gas pipeline system, Prime Minister Shmygal told an interdepartmental group on coordinating with the European Green Deal. “We aim to implement the European Green Deal together with the EU,” he said. “It is important for us to be early… and to receive support of the economic transformations in Ukraine from the EU.”
Ukraine should adopt fair, free, and clear market rules to take advantage of the growing investment boom in renewables, Maxim Timchenko, CEO of DTEK, wrote in a World Economic Forum essay titled: „Ukraine must work with leading nations to build sustainable energy markets.” Worldwide, annual investments in renewables may triple by 2050, from the current level of $300 billion, writes Timchenko, CEO of a company that has invested $1.5 billion over the last three years in wind and solar in Ukraine.
Ukraine’s February 1 re-imposition of price controls on gas “can be called a big step backwards,” warns Janez Kopač, a Slovenian politician who directs the Energy Community Secretariat, the organization which brings together the EU and its neighbors, to create an integrated energy market. “If this measure continues only to the end of March, everything will be fine,” he said at a remote conference organized by Kyiv’s Energy Club. “But if it lasts longer, it will put the gas market in jeopardy.” Adopted in response to this winter’s spike in gas prices, the 30% cut in prices is to last only until March 31.
Ukraine is preparing to introduce ‘passports’ attesting to vaccinations against Covid-19, Viktor Liashko, Ukraine’s chief sanitary doctor, tells Ukraina 24 TV. Everyone who is vaccinated will be registered with Ukraine’s Health Ministry. He said the government’s goal is to give free vaccinations to every Ukrainian over 18 years of age. Ukrainian International Airlines appealed to the Health Ministry to end self-isolation requirements for people with vaccination certificates who fly into Ukraine from ‘red zone’ countries.
About half of Ukrainians say they will not take a coronavirus vaccine even if it is free. Rating polling group found that 52% of 1,600 adults interviewed last week would turn down a free vaccination. Support for free vaccinations fell to 43% last week, from 55% in November. At same time, fear of infection has also dropped to 40% today, from 57% in November. Compared to November, publicly registered infections have dropped by about two thirds.
- France’s Alstom Gets UZ’s Big Electric Locomotive Contract
- $1 Billion Goes This Year to Rebuild Kyiv-Controlled Donbas
- Bank Profits Drop 27%, Branches Close
- Judge Tupytskyi Locked Out of his Court
French President Emmanuel Macron is to visit Ukraine this spring to sign a contract for Ukrzaliznytsia’s purchase of Alstom electric locomotives, Vadym Omelchenko, Ukraine’s Ambassador to France, said. “First of all, [there will be] a major contract with Alstom and the Ukrainian government for the supply of electric locomotives, which also provides for local content in Ukraine,” he told an online conference on the legacy of the Maidan. UZ executives say they need 50 locomotives, which could mean a €250 million contract. UZ has a $1 billion capital expenditure budget this year.
Ambassador Omelchenko said he hopes there will be a second Alstom contract – for building high speed train tracks between Kyiv and Lviv, and between Kyiv and Odesa. In addition, France and Ukraine will sign contracts for France’s supply of water purification plants for Kyiv and Luhansk, similar to an ongoing French project in Mariupol.
France’s Accor hotel group plans to open a second Ibis hotel in Lviv this year. The fourth Ibis for Ukraine, the new hotel is in rebuilt structure at Ivana Franka Street 23a, a 10-minute walk from Rynok Square. “Bright, modern and stylish hotel located in the center of this ancient city with historic and architectural heritage,” proclaims the presss release from Paris. Next year in Kyiv, Swissotel Living is to open a new hotel for Accor in a rebuilt historic building at Liuteranska 13, a five-minute walk from Kreshchatyk Street.
Almost $1 billion investment is going this year into the government-controlled portions of Donetsk and Luhansk, Oleksii Reznikov, deputy Prime Minister for Reintegration of the Temporarily Occupied Territories, writes in an Atlantic Council Ukraine blog. In addition to government budget money, he writes “credit and donor funds have allowed us to create a package of infrastructure projects in Donetsk and Luhansk Oblasts worth over $900 million, including highway and railway construction, water facilities modernization, improvements in energy infrastructure, agricultural infrastructure upgrades, and much more.” Investments are coming from the World Bank, the European Investment Bank, Naftogaz, and the governments of Canada, France, Germany, and Sweden.
Private business investment will be attracted, Resnikov writes, through “a range of incentives including tax and customs preferences, insurance against military and political risks, and international commercial arbitration.” The goal is to create “clusters of priority development in government-controlled parts of Donetsk and Luhansk Oblasts to encourage investment.”
After starting daily train service last month between Kyiv and the frontline city of Avdiivka in Donetsk region, Ukrzaliznytsia now plans to extend train service to within several hundred meters of Crimea’s two main Crimea checkpoints – Armyansk and Chonhar. By running Kherson region trains down to the checkpoints, UZ could pick up and deliver passengers traveling to and from the Russia-controlled peninsula. “We are working to restore communication with the territories adjacent to the Crimea,” Volodomyr Zhmak, CEO of Ukraine’s state railroad, tells Interfax-Ukraine. “Unfortunately, we cannot enter Crimea itself.”
Bank profits fell by 27% through November to $1.5 billion, reports the National Bank of Ukraine. Of Ukraine’s 73 banks, 11 reported losses and 62 reported profits. The leader was state-owned PrivatBank, the nation’s largest bank with 23 million clients, at a net profit last year of $886 million. State-owned Oschadbank came in second, with $172 million in net profit. Two privately owned banks followed: Austria’s Raiffeisen Bank Aval, with $133 million in net profit, and First Ukrainian International Bank, owned by Rinat Akhmetov, with a net profit of $89 million.
As Ukraine’s banks moved to remote work and online services last year, they permanently closed 11% of their branches, reports the National Bank of Ukraine. Oschadbank, owner of the largest branch network in Ukraine, closed the most branches – 490, or 56% of total closings. The other leaders were: PrivatBank – 211 branches closed; Raiffeisen Bank Aval – 100 closed; Alfa-Bank – 39 closed; and TAScombank and Sberbank – 16 closings each.
Ukraine’s Central Bank will keep its prime interest rate at 6% to continue supporting an economy struggling out of recession, 14 out of 16 analysts predict in a Reuters poll. The National Bank of Ukraine holds it scheduled monetary policy meeting. Inflation fears eased after the government imposed a two-month cap on gas prices, effective Feb. 1. Ukraine’s 2020 inflation rate was 5%, within the central bank’s target band.
Ukrainian businesses predict that 2021 will see 7.9% inflation and the hryvnia weakening by 5% to UAH 29.68 / $1. This are the consensus forecasts made by 693 business executives interviewed by the National Bank of Ukraine for its regular quarterly survey of business expectations of enterprises.
- 21% of companies plan to cut staff this year, down from 33% in the last survey.
- 63% of companies plan to increase salaries this year, up from 56% before.
- 42% of companies plan to borrow this year, unchanged from before. Of the borrowers, 77% plan to borrow in hryvnia.
On the eve of payments of UAH 12 billion on previously issued government bonds, the Finance Ministry raised UAH 12.33 billion, or $438.4 million, at last week‘s auction. To raise the bulk of the money – 82% — the government tweaked interest rates up slightly – to 11.75% for 14-month bonds, and to 11.95% for 2-year bonds. By squeezing the offer of 3-month bonds, the government lowered the rate to 9.45%, from 10%, the Ministry posted on its website. The other novelty was the first sale of 6-year bonds since the financial crisis hit Ukraine in March. In late February, the government sold UAH 1.33 billion of these bonds at 9.95%. Last week, the government sold nearly the same amount, but for 12.6%.
State security guards blocked Oleksandr Tupytskyi, chairman of the Constitutional Court, from entering the Court’s imposing courthouse at 14 Zhylianska St, Kyiv. Last fall, Tupytskyi started to dismantle much of the anti-corruption institutions installed in Ukraine. The court agenda included review of the farmland market law, the language law and the bank clean up law of 2015. President Zelenskiy reacted on Dec. 29 by temporarily suspending Tupytskyi. The Court responded saying only it can regulate itself. Investigators also formally notified Tupytskyi that he is a suspect in a witness tampering case.
The cost of shipping a container from China to Northern Europe has quadrupled since November, hitting $9,000 and higher today, reports Interfax-Ukraine. While shipping costs are expected to recede, today’s price spike could have two long term benefits for Ukraine. For one, it will stimulate EU manufacturers to shorten their supply lines and place manufacturing in Ukraine. Second, it will push Chinese shippers to send more containers by rail through Ukraine, routes that Ukrzaliznytsia promotes.
- Price Controls Slapped on Gas
- 2020 Vision: Farm Production Fell by 11.5%
- UZ Moves Half of the Nation’s Cargo
- Chinese Demand Pushes up Steel Prices, Production
- Gangsters Try to Sabotage Sale of State Titanium Co
- Flood of Square Meters Could Depress Office Rents in Kyiv
With gas prices spiking during frigid weather in Europe, Ukraine is cutting household gas prices by 30% and capping them until the end of March, according to a decision posted on the Cabinet of Minister portal. The decision came after scattered protests across the nation.
This reintroduction of price controls is expected to rule out Ukraine receiving an IMF aid tranche during the first quarter. Timothy Ash writes: “Hard to see the IMF lending while this cap remains in place.”
Corporate farms suffered a 14% yoy drop in crop harvests in 2020, the State Statistics Service reported. While this export-oriented sector was hardest hit, Ukraine’s overall agricultural production fell by 11.5% last year. This includes: crops, animals, family farms and company farms. Northern regions had the smallest declines: Rivne minus 3%; Sumy minus 4%; and Chernihiv minus 5%. Due to drought, the biggest drops were in south and central Ukraine: Cherkasy minus 24%; Kirovograd minus 32%; and Odesa minus 38%.
Ukrzaliznytsia trains carried 61% of the Ukraine’s grain for export last year, the railroad reports. Overall, UZ moved 35.2 million tons of train last year – 87% for export. Grain accounted for 11.5% of the railroad’s cargo tonnage last year.
Ukrzaliznytsia, the workhorse of Ukrainian logistics, carried 40 million tons of cargo between Ukraine and the EU last year, the state railroad reports. One quarter of that traffic was with Poland. Exports to the EU accounted for 28 million tons, imports 4 million tons, and transit 7.5 million tons. Other than to say that cargo between Romania and Ukraine increased by 21%, to 4 million tons, the railroad did not give comparative figures for 2019. The other three big destinations last year were: Slovakia, Czech Republic, and Italy.
Rail container traffic grew by 11%, to 425,000 TEUs in 2020, Ukrzaliznytsia reports. The portion of traffic carried in dedicated container trains jumped by 41%, to 230,000 TEUs. Direct container trains from China to Kyiv started June 8 and rose to the frequency of almost once a week. Next month, Chinese railway operator East Line starts sending container trains to Kyiv from two logistics centers in eastern China: Nanchang, and, 1,000 km to the north, Jinan.
Chinese trains passing across Ukraine to the EU “significantly increased,” UZ said. Seeking to develop Ukraine as a transportation corridor, UZ is developing new EU routes with DHL Global Forwarding and with Ukrainian companies for a multimodal ferry-train route – Turkey-Ukraine-Poland.
Fueled partly by Chinese demand, Metinvest, Ukraine’s largest private company, rode strong steel prices to report steel output growth by 9% yoy last year, to 8.3 million tons. Its Inhulets mining and processing plant in Kryvy Rih, reported a 8% yoy growth in production of iron ore concentrate, to almost 12 million tons. Mariupol Illich Iron and Steel Works, in Donetsk region, increased production of rolled steel products, by 12.4% yoy, to 3.7 million tons.
Looking ahead, Concorde Capital’s Dmytro Khoroshun writes: “We expect Metinvest to continue producing steel at daily rates of at least 23-24 kt in January-February in order to make the most of the recently skyrocketed prices.”
Ukraine’ pig iron exports increased by 20% yoy last year to 3.1 million metric tons, reported Steelorbis news site. In value terms, exports rose 15% to $992 million. The biggest buyers were: US – 58.5%; China -22%; and Turkey – 6%.
Interpipe Steel said that it is the Ukraine’s first steel company to meet European Green Deal targets for 2050: its emissions do not exceed 250 kg of CO2 per ton of steel produced. This producer of steel pipes and railroad wheels in Dnipropetrovsk was built from scratch nine years ago involving $1 billion investments. Founded and owned by Viktor Pinchuk, the company made these announcements on the occasion of the arrival of the company’s new CEO, Artem Polyakov.
“Law enforcement agencies, former shadow owners and oligarchic groups” and attempting “to stop and roll back the privatization” of United Mining and Chemical Company, Ukraine’s state-owned titanium producer, the State Property Fund charged. If such attacks are not repelled, Ukraine could lose $430 million in budget revenues through aborted privatizations, says Dmytro Sennychenko, director of the Fund. Due to such resistance to privatization, Ukraine has about 3,000 state companies almost 30 years after the fall of communism. In the case of the mining company, 16 investors – national and foreign – have registered for a privatization auction, tentatively set for this spring.
Kyiv’s office vacancy rate grew to 12.5% in 2020, up from 9% in 2019, reports NAI Ukraine, the commercial real estate consultancy. At the same time, rents dropped by an average of 20%: to $20-30 per square meter in class A offices and to $12-23 per square meter in class B offices. In addition to the recession, the market took two hits: the addition of 80,000 new square meters and a massive shift to remote working. Largely fueled by IT companies, the volume of gross absorption – or total amount of office space leased in Kyiv – amounted to 85,000 square meters.
This year could be good for renters and tough for landlords. Plans call for developers to unleash 370,000 square meters of new space on the market – almost five times the 2020 amount. At the same time, coronavirus remains a factor. “In 2021, the remote work is likely to continue to prevail: this is fully true for the first half of the year, and from the second half of the year there is a high probability of a gradual return to work in offices,” writes NAI Ukraine. “This is a question of the speed and efficiency of vaccinations and quarantine measures. Nevertheless, experience of effective work online will bring changes to the organization of office spaces forever.”
The government is negotiating with six vaccine manufacturers with the goal of starting vaccinations one month from now, Shmygal said. Separately, UIA has said it has prepared two Boeings to transport vaccines as cargo. Since March, 20,869 Ukrainians have died of the virus.
- Epicenter K Taps Dutch Bank to Help with $1.2 billion Investment
- Shopping Mall Traffic Down, Retail Sales Up
- After Delays, Corruption Charges, Gov’t Contracts UK’s Crown Agents to Buy Covid Vaccines
- Ukraine Orders 8 New Transport Jets, First From Kharkiv Factory since 2014
Epicenter K, Ukraine’s largest retailer, plans to invest $1.2 billion through the end of next year, Petro Mykhailyshyn, Director General of the group, said at a press conference at Interfax-Ukraine. To help finance the investment, more than triple the amount invested in 2019, the company plans to raise a loan from ING, the Dutch bank. Some of the loan would be used to buy equipment from Vanderlande, the Dutch logistics automation company. Atradius, the Dutch trade insurance company, would provide cover.
Epicenter, Ukraine’s version of Home Depot, has 62 hypermarkets with a total area of over 1 million square meters nationwide. Recently, the company has invested in farming and logistics. Mykhailyshyn told reporters: “We hope and intend this year to make an unprecedented investment in the development of all segments of our company, all businesses, and this is construction activities, the agricultural sector, the production of ceramic tiles and other building materials, as well as the development of logistics fulfillment centers.”
To reach Ukraine’s smaller cities, Epicenter is building up to 100 smaller format stores – retail spaces with 4-6,000 square meters, Mikhailyshyn told Interfax-Ukraine in an interview. Aiming at the hundreds of small cities with 10-15,000 inhabitants, Mikhailyshyn said: “We are developing an online system with a large logistics infrastructure, which will provide residents not only of regional centers, but also villages.”
Although attendance at shopping malls dropped by 26% yoy last year, overall retail sales were up 7.6% for the first 11 months of 2020, reports NAI Ukraine, the commercial real estate consulting company. Alarmed by the coronavirus quarantine controls, many shopping center developers pushed off openings to 2021: stage two of the Blockbuster Mall – 55,000 square meters; Ocean Mall – 99,000; the stage two of April – 47,000; and White Lines – 21,000. With these four expansions alone – 222,000 square meters – rents will remain soft and the retail vacancy rate is expected to rise above its current level of 10%, NAI predicts in its study.
Online orders through OLX Delivery, one of Ukraine’s largest internet shopping platforms, jumped for the for the period Dec. 9 to Jan 13, compared to last year, the company’s analytical service reported. Orders for men’s clothing doubled, while the check remained about the same – $20. Orders for men’s shoes were up 94%, for electronic components up 74%, and for smartphones up 63%.
Since last week service personnel in all stores, restaurants, cafes, pharmacies, and gas stations, must first address customers in Ukrainian. Customers are not obligated to use Ukrainian and can communicate in any language they want, including Russian or English. If a business repeatedly refuses to greet customers in Ukrainian, it will be subject to a $200 fine.
Facing complaints about coronavirus vaccine profiteering and delays, Ukraine’s Health Ministry signed a contract last week with Crown Agents, a British international development company, to buy the Chinese Sinovac Biotech vaccine. Health Minister Maksym Stepanov said that vaccinations will start in the middle of February, two months after the US and UK. The first 350,000 to be vaccinated will be: doctors and nurses working with Covid patients, ATO soldiers and workers at elderly homes.
In March, the mass vaccination of 2.5 million Ukrainians is to start. Later in the spring, people will be able to buy vaccinations – a window for foreigners to get vaccinated here. Minister Stepanov tells Ukraina 24 TV that people who are vaccinated will get ‘passports’ – certificates to facilitate foreign travel. Currently, about 7,000 new Covid cases are reported daily in Ukraine, about half the level of six weeks ago.
Foreign holdings of Ukrainian bonds ticked up 3.8% in the first two auctions of 2021, hitting UAH 87.6 billion, or $3.1 billion. Foreigners now hold 8.75% of the Ukrainian government bond market, according to Central Bank figures. The growth comes after a gradual 27.1% fall during the first 11 months of 2020. By contrast in 2019, foreign investment in the bonds increased 18-fold, ending the year at UAH 115.8 billion.
Air traffic in and out of Kharkiv, Ukraine’s second largest city, dropped by 51% last year, slightly better than the nationwide drop of 64%, reported the Center for Transportation Strategies. Worldwide, passenger traffic dropped by 60%, hitting the level of 2003, International Civil Aviation Organization reports in a study headlined: „2020 passenger totals drop 60 percent as COVID-19 assault on international mobility continues.” For Ukrainian travel agencies, sales volumes fell by 70%, Pavel Grigorash, executive director of the national Association of Travel Agencies, tells Economic Truth website.
Ukraine’s Armed Forces plan to order up to eight new An-74 multipurpose transport jets to start replacing its aging An-26 fleet, Minister for Strategic Industries Oleh Uruskiy writes on Facebook. The orders would go to Kharkiv State Aircraft Production Enterprise, a manufacturer that has not completed a plane since 2014. However, the factory has six An-74s on its assembly lines, about 70-90% complete, reports Defence Blog. Four planes would go to Ukraine’s Air Force for transport and four would to the Navy for maritime patrol. Between 1985 and 2004, the factory made 62 An-74s. The need to upgrade Ukraine’s military transport became clear last September when a 43-year-old An-26 crashed near Kharkiv, killing 26 Air Force cadets and instructors.
The original English version is from our partner UBN – Ukraine Business News. For more information and news archive, go to: www.ubn.news.
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