The Cabinet has again extended the quarantine, this time to the end of the summer, the Parliament reduced the rate of elektrotribe for solar and wind power stations, and the Ministry of Finance issued a 12-year Eurobonds for $ 2 billion – these are the main economic news this week.
The Cabinet of Ministers this week has returned the attention to the main economic factor 2020 – quarantine, which is valid in the country in one form or another since mid-March. On Wednesday, the government predicted made the decision on the extension of adaptive quarantine until August 31.
Use a relaxed, adaptive approach to restrictive measures for the national economy this week has shown a statistically. In particular, industrial production in June compared to may grew by 4.1 percent, for the second consecutive month showing signs of recovery. In annual terms industrial production is still declining (in June and by 5.6 percent), but the positive trend is becoming more apparent.
The recovery of industrial production this week received the organizational support of the government, which on Wednesday was created by the Department for strategic industries. According to Vice Prime Minister – Minister of strategic industries Oleg Urusky, the new Agency will be responsible for the implementation of the state policy in the sphere of strategic industries of Ukraine.
Will this Ministry a real catalyst for positive change in the industry in these difficult times – a question to which officials, representatives of business and society has yet to find the answer.
The reduction of “green” elektrotribe
This week Parliament finally took a step to solving the problem of excessive tariffs for electricity generated by solar and wind power, which has become one of the causes of acute crisis in the Ukrainian energy sector.
On Tuesday the Verkhovna Rada at the extraordinary session adopted the law on reducing the rates of “green” tariff, according to which the state is obliged to buy the produced by these types of generation of electricity. The document envisages a reduction of tariff for solar power by 15 percent, and for wind – 7.5 percent.
Prime Minister Denis Shmyhal stressed that this decision will save the state significant funds.
“In practice, this means that the state and all Ukrainians will save nearly 7 billion hryvnia per year. By 2030, the Memorandum will reduce the amount of payments to the “green generation” by about 2 billion euros,” he said.
Such excessive optimism of the Prime Minister is discordant with the regulations of the adopted draft law, according to which not less than 20 percent of the cost of compensation of the state company “Guaranteed buyer”, which is obliged to buy all produced “green” electricity stations, will be paid from the state budget, so – at the expense of taxpayers. According to estimates acting Minister of energy Olga Bukovec, this amount annually will be about 10 billion hryvnia.
Representatives of the alternative energy industry has criticized the new law, saying that Parliament did not consider a number of important amendments, which were requested by public organizations and international partners of Ukraine.
It is obvious that the situation with prices of “green” energy is still very far from being resolved, therefore, most likely, do not expect that the Rada passed the law will be “forever”.
This week was different and other important news from the world of energy. So, on Wednesday, the state holding “Naftogaz Ukraine” reported that in July the wholesale price of natural gas for the population will be 2 298 UAH per thousand cubic meters (without VAT, margins of gatsbies and the cost of transportation of gas transmission and distribution pipelines), which is 7 percent more than in June 2020.
Also from 1 August, Naftogaz has set a minimum price for natural gas for industry on level 2, 982 hryvnia per thousand cubic meters, which is 8 cents more than in July. The increase is minor, but can certainly affect the final value of industrial production, and hence on their competitiveness and the purchasing power of citizens.
By the way, this week drew attention to the statement of the head of the government of Smugala that Ukraine has already accumulated enough coal and gas for your comfortable during the heating season 2020-2021 years.
Ukraine back on the global debt market
Important news this week for financial markets was the announcement that the Ministry of Finance at the second attempt placed the 12-year Eurobonds maturing in March 2033 for $ 2 billion under 7.25 percent per annum.
It will be recalled that in early July, Ukraine has canceled the bond issue maturing in 2033 in the amount of $ 1.75 million after the unexpected news that the then head of the national Bank Yakov Smoliy resigned, due to “political pressure”.
On Friday it became known that Ukraine at the expense of a new issue of Eurobonds redeemed Eurobonds maturing in 2021 and 2022, totaling more than 846 million dollars.
This week, Ukraine received financial support with the EU. Prime Minister Smigel during a visit to Brussels signed a Memorandum on the allocation of our country’s macro-financial assistance from the European Union in the amount of 1.2 billion euros.
According to the head of the government, the loan divided into two tranches of 600 million euros each. The first tranche is unconditional and will be made available after the ratification of the Memorandum by the Verkhovna Rada. The second tranche will be allocated after the reforms, which the government plans to complete this year and at the beginning of 2021-th.
The inflow of such amount of foreign currency in the Ukrainian financial system may become a positive signal for actively devalued in recent hryvnia. Only this week, the dollar rose more than 50 kopeks, and Euro – almost UAH 1.
The national Bank attributed such fluctuations to the psychological factors.
“First and foremost, it is responding to allegations that the hryvnia will be weaker. It happens, happened and will happen, but the national Bank has the tools, how to work with it, and it works,” – commented the Deputy head of the national Bank Dmitry Sologub.
However, from this statement of the representative of the NBU ordinary Ukrainians – neither cold nor hot. The devaluation of hryvnia, the cost of gas and, in General, the difficult economic situation in the country will definitely not help to improve the purchasing power of compatriots and only increase social tensions in society.
In the last week of July in most regions of Ukraine will return 30-gradusnoj heat, Ukrainian agrarians continue the harvesting of grain, the national Bank will report on the status of the balance of payments and the SSS reminded of purses, presenting the statistics on wages for June.
The Verkhovna Rada