Deflation, a sign of collapsed consumer demand, fell to -0.2% in August

Deflation, a sign of collapsed consumer demand, fell to -0.2% in August, the State Statistics service reported yesterday. In annual terms, inflation in August 2020 was 2.5%. With buying power returning, inflation is expected to grow gradually in coming months.

The ICU investment group has improved its forecast for Ukraine’s GDP this year, lowering its estimate of the fall to minus 5.7%

The ICU investment group has improved its forecast for Ukraine’s GDP this year, lowering its estimate of the fall to minus 5.7%, from its earlier forecast of minus 6.7%. This year’s drop will be cancelled out by next year’s growth of 5.6, Sergiy Nikolaychuk, the head of ICU’s macroeconomic research tells Interfax-Ukraine. He said the softening of this year’s fall “was facilitated by the rapid ‘turn on’ of the economy in the summer, and by the improvement of the terms

Iron ore exports were up 13% through August,

Iron ore exports were up 13% through August, compared to the tonnage for the first eight months of last year, reports the State Customs Service. Companies exported 31 million tons, earning $2.5 billion. The top three importers of Ukrainian iron ore are: China – 34%; Poland – 12%; and the Czech Republic – 10%.

By the end of this year, the government plans to privatize: Kyiv’s President Hotel, the Odessa Port Plant, the Electrotyazhmash plant, the Krasnolimanskaya Coal company and the United Mining and Chemical Company.

By the end of this year, the government plans to privatize: Kyiv’s President Hotel, the Odessa Port Plant, the Electrotyazhmash plant, the Krasnolimanskaya Coal company and the United Mining and Chemical Company. Yesterday, the Cabinet of Ministers approved this list. A Rada vote will be needed to lift the freeze on privatisations, approved last spring, at the start of the coronavirus quarantine, Svetlana Panaiotidi, deputy economy minister, wrote on Facebook.

Capital investment in Ukraine’s economy shrank by 35% in the first half of the year

Capital investment in Ukraine’s economy shrank by 35% in the first half of the year, compared to  January-June 2019, according to the State Statistics Service. The new level of investment was $5.9 billion. All sectors recorded declines, with the biggest in: art, sports, entertainment and recreation – 74%; hotels and restaurants – 58%; and transportation – 54.5%.

Justifying Ukraine’s recent stealth re-purchase of 10% of its $3.2 billion in GDP-linked warrants

Justifying Ukraine’s recent stealth re-purchase of 10% of its $3.2 billion in GDP-linked warrants, Finance Minister Sergiy Marchenko confirmed that the 2015 warrants are a financial time bomb that could cost the nation up to $22 billion by 2040. With current GDP growth forecasts, Ukraine will have to make its first pay out – $40 million – next year. By 2023, payments could balloon to $600 million. Speaking to the Rada Committee on Finance, Tax and Customs Policy, he justified

Ukraine’s Supreme Court has frozen a lower court decision that would have forced state-owned PrivatBank to pay $350 million to Ihor and Hryhoriy Surkis

Ukraine’s Supreme Court has frozen a lower court decision that would have forced state-owned PrivatBank to pay $350 million to Ihor and Hryhoriy Surkis, two brothers seen as ‘related parties’ to the owners who looted the bank until its nationalization in 2016. Last week, a lower court ruled the brothers’ six British companies can start withdrawing the first portion of the $350 million. That ruling drew widespread condemnation and seemed to raise a red flag to continued cooperation with the IMF.

Concorde Capital’s

Concorde Capital’s Alexander Paraschiy writes: “A solid reaction from the government to an apparently ill-grounded court ruling that costs about UAH 10 billion [$360 million] to the state bank is a good signal. Such a reaction significantly decreases the chances that the Surkises will be able to withdraw money from the bank, though it does not completely rule out such an event.”

China’s Skyrizon, and Kharkiv’s DCH Group will submit an updated application

China’s Skyrizon, and Kharkiv’s DCH Group will submit an updated application to the Antimonopoly Committee of Ukraine for the purchase of Motor Sich, the Zaporizhia-based aircraft engine maker, Interfax-Ukraine reports. It cites a notice sent to the Shanghai Stock Exchange by Beijing Xinwei Technology Group, parent company of Skyrizon. Interfax reports that Chinese accumulated 75% of Motor Sich shares before Ukraine’s State Security Service intervened to stop the sale. Skyrizon threatens to sue Ukraine, demanding compensation for $3.5 billion in

Concorde Capital’s Alexander Paraschiy writes

Concorde Capital’s Alexander Paraschiy writes: “The stakes are rising for Ukraine in the Motor Sich story. If this case shifts to a geopolitical battle between China and the U.S., Ukraine will have to choose between the two sides, which could lead to significant losses for the country. But what it can lose for sure is Motor Sich itself.”

Kyiv registered a record 310 new coronavirus infections yesterday,

Kyiv registered a record 310 new coronavirus infections yesterday, announced Mayor Klitschko. To publicize the problem, he was later filmed visiting a Covid treatment hospital in the capital. Of the 310 new cases, 43 are hospitalized. The rest are undergoing medical treatment at home. Separately, the Ukrainian Armed Forces confirmed 68 new coronavirus cases yesterday. Currently 534 soldiers are in isolation after testing positive for the virus.

European airlines are testing the waters with announcements of expanded schedules to Ukraine.

European airlines are testing the waters with announcements of expanded schedules to Ukraine. Starting Oct. 25, Air France will fly between Paris Charles de Gaulle and Kyiv Boryspil three times a week. Starting Oct. 27, Ryanair will fly daily between Kyiv Boryspil and Berlin Schönefeld. Last week, Poland’s LOT increased the frequency of its flights between Lviv and Warsaw-Chopin, from daily to 12 times a week.

Rail freight volumes were up 10.3% last month over the level of August 2019

Rail freight volumes were up 10.3% last month over the level of August 2019. Ukrzaliznytsia moved 28.3 million tons of cargo last month, reports RAIL.insider, drawing on statistics from the portal Data.gov.ua. August was the fourth month of rail cargo growth and the first month that cargo levels surpassed those of one year earlier. The state railroad moves the bulk of the nation’s exports and cargo subsidizes passenger service. Since January, UZ has carried almost 200 million tons of cargo.

Electricity consumption in August 2020 returned last year’s level

Electricity consumption in August 2020 returned last year’s level, reports Ukrenergo, the state-owned power grid operator. Compared to August 2019, household power consumption was up last month by 5.7%. Industry was down 2.9%. Within the industrial grouping, downturns in consumption were: machine-building industry -12%; metallurgy -6%; and fuel -3%. At the same time, electricity consumption grew by an average of 5% in food processing, chemicals and petrochemicals, and building materials.

Facing weak investor demand, the Finance Ministry sold on Tuesday only one third the volume of hryvnia bonds as at last week’s auction, and at slightly higher yields

Facing weak investor demand, the Finance Ministry sold on Tuesday only one third the volume of hryvnia bonds as at last week’s auction, and at slightly higher yields. In yesterday’s auction, the government sold the hryvnia equivalent of $35 million, one third for 1-year bonds and two thirds for 3-year bonds, the Ministry reported on Facebook. The weighted average yield for 1-year bonds was 9.28%, virtually unchanged. For 3-year securities, the yield was 10.46% – 46 basis points above the

Fitch, the ratings agency that most closely follows Ukraine, reaffirmed its ‘B’ rating for Ukraine last Friday

Fitch, the ratings agency that most closely follows Ukraine, reaffirmed its ‘B’ rating for Ukraine last Friday, with a stable outlook. Japan’s R&I upgraded Ukraine’s sovereign rating last week by one notch, from B to B+, outlook stable. Since March, Standard & Poor’s has given Ukraine a B stable rating. In June, Moody’s brought Ukraine up one notch to B3 stable.

Concorde Capital’s

Concorde Capital’s Alexander Paraschiy writes: Looking at the balance of possible positive and negative triggers for Ukraine’s rating, we see a low chance for Ukraine to get any better rating in the next year.

Ukraine’s international reserves grew to $29 billion in August, the highest level in eight years

Ukraine’s international reserves grew to $29 billion in August, the highest level in eight years, reports the National Bank of Ukraine. Boosting reserves, foreign travel by Ukrainians was down sharply due to the coronavirus restrictions and the nation enjoyed a trade surplus.

Ukraine is on track with the IMF,

Ukraine is on track with the IMF, Finance Minister Serhiy Marchenko said Monday on Inter TV’s Details of the Week program. He said: “We are in a dialogue with the IMF, and  hope to receive the next tranche. We have two more tranches planned by the end of the year for $700 million each, and  in the near future there will be an online conference, that is, it will not be a visit, it will be an online mission of

Timothy Ash retorts from London: “

Timothy Ash retorts from London: “The danger with this official line that things are fine on the IMF front is that politicians are lulled into a false sense of security, when the reality is that this Fund program is in serious trouble. Someone needs to read the riot act to the Zelenskiy Administration that unless they address the mounting list of issues related to the National Anti-Corruption Bureau, the anti-corruption agenda more generally, independent supervisory boards at state companies, PrivatBank

Domestic air flights were down the least of air travel in August, down only 17% yoy to 2,519

Domestic air flights were down the least of air travel in August, down only 17% yoy to 2,519, reports UkSATSE, Ukraine’s air traffic control agency. By contrast – international flights to and from Ukraine were down 50%, to 8,249, and transit flights through Ukraine’s air space were down 68%, to 5,922. After last spring’s collapse, air flights in Ukraine have steadily recovered:  2,372 flights in April; 3,237 in May; 4,584 in June; 12,195 in July; and 16,690 in August. Flights

By 2023, several key regional airports will be reopened under the ‘Big Construction’ program

By 2023, several key regional airports will be reopened under the ‘Big Construction’ program, President Zelenskiy promised last week on a visit to Poltava airport. “We will add all airports to the program,” he said, referring to second tier airports that have languished since the 1990s. Promising to start rebuilding Poltava’s runway next year, he said: “We will definitely make Poltava Airport part of our ‘Big Construction’ program.”

President Zelenskiy promised yesterday to rebuild the runway of Sumy airport, if the regional government finds an investor to rebuild the terminal.

President Zelenskiy promised yesterday to rebuild the runway of Sumy airport, if the regional government finds an investor to rebuild the terminal. “We are ready to build this strip in Sumy,if you have those who will build the terminal in parallel,” he told Roman Grishchenko, head of the regional administration, on a visit to the airport. Two years ago, the Infrastructure Ministry estimated that it would cost €25 million to rebuild the Soviet-era terminal and the 2,500-meter runway. Without scheduled

Zakarpattia will get an international standard airport with the construction in coming years of a $145 million airport in Mukachevo,

Zakarpattia will get an international standard airport with the construction in coming years of a $145 million airport in Mukachevo, Infrastructure Minister Vladyslav Krikliy promises on Facebook. Last month, the Cabinet of Minister approved spending $1 million to design an airport on the site of an abandoned Soviet-era air base south of the city. Under the plan, a private investor would build the terminal. The Infrastructure Ministry would build a 2,500-meter long runway, capable of handling B737 and A320 passenger

Zhytomyr regional authorities are talking with a private investor to build an air cargo hub at Zhytomyr airport, a 90-minute drive west of the Kyiv’s Ring Road.

Zhytomyr regional authorities are talking with a private investor to build an air cargo hub at Zhytomyr airport, a 90-minute drive west of the Kyiv’s Ring Road. Vitaly Bunechko, head of the regional government, tells Interfax-Ukraine that the airport first needs $13 million in government aid to expand the runway by 50%, to 2,500 meters. Opened in 1939, the airport provides maintenance for Yanair’s all-Boeing fleet of 737s and offers easy access to Sergei Pavlovich Korolyov Museum of Cosmonautics.

Corona virus infections, hospitalizations and deaths are running at double the levels of one month ago

Corona virus infections, hospitalizations and deaths are running at double the levels of one month ago, Ukraine Health Ministry figures show. On Monday morning, Health Minister Maksym Stepanov announced that 57 people died in the last 24 hours. At the same time, 2,411 new cases were announced, and almost 8,000 people are undergoing treatment in Ukrainian hospitals.

Ukraine may place $1-1.5 billion worth Eurobonds this fall to cover the budget deficit and to buy back more GDP warrants

Ukraine may place $1-1.5 billion worth Eurobonds this fall to cover the budget deficit and to buy back more GDP warrants, predicts Bank of America Securities. This would follow July’s successful placement of $2 billion worth of 13-year Eurobonds. That deal, at 7.25%, was three times oversubscribed. Potentially chilling foreign interest, the IMF’s planned September review of the $5 billion Standby Agreement with Ukraine may be delayed, BofA warns.

A Chinese state company is discussing building a massive Black Sea grain terminal that could handle 5 million tons a year, the equivalent of 10% of Ukraine’s corn and wheat exports

A Chinese state company is discussing building a massive Black Sea grain terminal that could handle 5 million tons a year, the equivalent of 10% of Ukraine’s corn and wheat exports. Yesterday, representatives of China Road Construction Corporation International Investment met with executives of Pivdennyi port, Ukraine’s deepest and busiest port. The project would represent a big expansion for Pivdennyi, located 45 km east of Odesa. Last month, iron ore accounted for 86% of the 1.5 million tons of cargo

Chinese container trains now arrive at Kyiv at the pace of one a week

Chinese container trains now arrive at Kyiv at the pace of one a week, reports Ukrzaliznytsia. Traveling 9,000 km from Nanchang in 15 days, the latest train arrived Saturday at Kyiv’s left bank Liski freight depot. Its 41 containers carried mineral fertilizers, lamps, bulbs, medical cargo and chemical components for filtering water. With three more container trains due to arrive this month, Ukrzaliznytsia is booking return freight of Ukrainian goods for China.

Ukraine seeks Chinese investment in industrial parks specializing in processing, storing and transshipping food

Ukraine seeks Chinese investment in industrial parks specializing in processing, storing and transshipping food, Olga Stefanishyna, deputy prime minister for European and Euro-Atlantic Integration, yesterday told China’s new ambassador to Ukraine, Fan Xianrong. Ukraine wants to increase food exports to China, and to use Chinese free ports to export to Pacific Basin countries, she said, reports the Cabinet of Ministers website. “To intensify cooperation,” her Ministry is establishing a working group with the Chinese embassy.

Through August, Ukraine’s seaports handled 5% more cargo than during the same period last year

Through August, Ukraine’s seaports handled 5% more cargo than during the same period last year, reports the Ukrainian Sea Ports Authority. The 106 million tons of cargo breaks down as follows : exports +5.4%, to 81 million tons; imports +1%, to 16 million tons; transit +4.6%, to 7.3 million tons; cabotage +31%, to 1.6 million tons. The two main export product were nearly even: grain – 30.7 million tons; and metal ore – 30.2 million tons. Pig iron exports jumped

Ukraine’s top five ports handled 91.5% of the nation’s cargo during the first eight months of this year,

Ukraine’s top five ports handled 91.5% of the nation’s cargo during the first eight months of this year, reports the Sea Ports Authority. Pivdennyi once again was the most dynamic, with its cargo levels growing by 25% yoy, to handle 42 million tons, or 40% of the nation’s total. This growth was at the expense of Ukraine’s next three busiest ports: Mykolaiv -10%, to 19.2 million tons; Odesa -7%, to 15.6 million tons; and Chornomorsk -1%, to 15.4 million tons.

Ukraine’s exports are recovering from last spring’s corona-recession.

Ukraine’s exports are recovering from last spring’s corona-recession. August exports were down only 1.6% yoy, “which in the context of a pandemic sounds like fantasy,” Taras Kachka, deputy minister of Economic Development, Trade and Agriculture, writes on Facebook. “International trade is recovering at a much faster pace than after the 2008 crisis.”  For the first eight months of the year, exports are down 6.6%, to $31 billion. With imports down by 12.4%, the trade deficit through August is $1.3 billion,

Ukraine exports of corn, wheat, and barley will drop around 9% yoy, to 51 million tons

Ukraine exports of corn, wheat, and barley will drop around 9% yoy, to 51 million tons, in the current marketing season, predicts Grainmart, India’s first Grain Trading B2B online marketplace. Based near New Delhi, Grainmart draws on figures from the Ukrainian Grain Association.

Two years after Saudi investors bought Ukraine’s troubled

Two years after Saudi investors bought Ukraine’s troubled Mriya Agro Holding, a shipment of 60,000 tons of Ukrainian wheat is on its way to Saudi Arabia. In the first such shipment to Saudi Arabia in 12 years, a Panamax carrying Ukrainian grain from Chornomorsk arrives Sept. 17. In 2018, Saudi Agricultural Investment and Livestock Company, or Salic, bought Mriya and merged it with its existing Ukraine farms under an umbrella company, Ukrainian Continental Farmers Group. Georg von Nolcken, general director

Poisoned Russian opposition activist Alexei Navalny has improved, doctors treating him in Berlin say.

Poisoned Russian opposition activist Alexei Navalny has improved, doctors treating him in Berlin say. He is out of a medically-induced coma, is being weaned off a ventilator, and “is responding to verbal stimuli,” the doctors say at Charité, the Berlin hospital where he is being treated. Germany’s government has asked Russia’s government to explain why Navalny was poisoned with a military grade poison. Reaffirmed yesterday, Chancellor Angela Merkel’s position is that Kremlin noncompliance with an investigation could force Germany to

Germany May Not Even Need the Nord Stream Pipeline Right Now

Germany May Not Even Need the Nord Stream Pipeline Right Now, headlines a Bloomberg analysis from Berlin. “Europe is flooded with gas and demand is likely to remain stable,” reads the energy market analysis. “With storage sites in Europe almost full, the European benchmark contract has more than halved since its peak in 2018.” With the rise of wind and solar and increasing energy efficiencies, Europe’s gas demand is to remain flat for the next five years, predicts the International

“Has Vladimir Putin Poisoned His Pet Pipeline Project?”

“Has Vladimir Putin Poisoned His Pet Pipeline Project?” Diane Francis, an opponent of the gas line, asks in an Atlantic Council Ukraine blog.

Ukraine’s natural gas imports jumped 67% yoy in August, as EU gas traders filled Ukraine’s gas storage reservoirs to a record 84% of capacity.

Ukraine’s natural gas imports jumped 67% yoy in August, as EU gas traders filled Ukraine’s gas storage reservoirs to a record 84% of capacity. Traders store their gas in Ukraine, waiting for the traditional autumn rise in prices as Europe prepares for winter. For its own use, Ukraine’s Naftogaz had 26 billion cubic meters in storage on Saturday, 39% more than one year earlier.

Mikheil Saakashvili was chosen yesterday to lead an 11-party opposition coalition in Georgia’s Oct. 31 parliamentary elections.

Mikheil Saakashvili was chosen yesterday to lead an 11-party opposition coalition in Georgia’s Oct. 31 parliamentary elections. If the coalition wins, the former Georgian president would become prime minister. If the coalition loses, Saakashvili presumably would return to his Kyiv job: chairman of Ukraine’s National Reform Council. Levan Varshalomidze, former governor of Batumi and a longtime ally of Saakashvili, also took a sabbatical last week from his Ukraine job, board chairman of UkraineInvest.

Traffic at Boryspil was down 60% yoy in August, to 656,029 passengers,

Traffic at Boryspil was down 60% yoy in August, to 656,029 passengers, reports the Center for Transportation Strategies. Traffic on charter flights was down by only 9%, indicating that Kyiv residents cling to their package tours to Egypt and Turkey. By contrast, traffic on regular flights – largely to the EU and North America – was down by 78%. Traffic is expected to be even worse in September because the government has closed Ukraine to most foreign visitors for the

Nils Schmid, foreign policy spokesman for the SPD

Nils Schmid, foreign policy spokesman for the SPD, a junior partner in the Merkel coalition, said: “We need to make it clear that all talk of a strategic partnership with Russia is now over.”

Three months after the end of Kyiv’s full corona lockdown, daily metro ridership is about one million, down by one third from the pre-lockdown volume 1.5 million.

Three months after the end of Kyiv’s full corona lockdown, daily metro ridership is about one million, down by one third from the pre-lockdown volume 1.5 million. Normally, the Kyiv’s subway system earns $10 million a month. Due to the spring lockdown and today’s week ridership, the Metro may run out of money to pay salaries next month, the transit system reports in an appeal to the Kyiv City Council for more money.

Christian Lindner, leader of the liberal FDP party, said

Christian Lindner, leader of the liberal FDP party, said: “A regime that organizes murders by poisoning is no partner for big cooperative projects — and that includes pipeline projects.”

Katrin Göring-Eckardt, leader of the Greens in parliament

Katrin Göring-Eckardt, leader of the Greens in parliament, said: “Nord Stream 2 is no longer something we, together with Russia, can press ahead with.”

While Germans wait for Merkel’s move

While Germans wait for Merkel’s move, Bild, Germany’s best-selling newspaper, calls on the Chancellor to “stop Putin’s pipeline.”

In Ukraine, Germany’s Ambassador Anka Feldhusen joined her G-7 counterparts yesterday to lobby Prime Minister Shmygal to defend PrivatBank

In Ukraine, Germany’s Ambassador Anka Feldhusen joined her G-7 counterparts yesterday to lobby Prime Minister Shmygal to defend PrivatBank against attempts to reverse the 2016 nationalization of the Ukraine’s largest bank. With EU and IMF support, $5.5 billion was injected into the bank in 2017, filling a hole left by what forensic auditors have called an orgy of insider lending and theft.