ECONOMY
Ukraine’s gross domestic product was up 5 percent in the first half of this year compared to the same period last year, the State Statistics Committee said. GDP in June was Hr 13.5 billion, up 3.4 percent on June 1999. The government in early July raised its GDP growth forecast for the year from 1.5 percent to 2 percent.
Foreign direct investment into Ukraine was $378.7 million in the first six months of the year, up 50 percent on the same period a year ago, the official government daily Uryadovy Kurier reported. Net FDI since independence in 1991 totaled $3.375 billion as of April 1, according to official figures. U.S. investors have been the most active in Ukraine, pumping $613.9 million into the country since independence.
Industrial output rose by 10.8 percent in the first six months of the year compared to a 1.1 percent fall in the same period a year ago, the State Statistics Committee said. The sharp rise prompted the government to raise its output growth forecast for the year to 7 percent. The previous forecast was for a 3.2 percent rise. Industrial production rose by 4.3 percent in 1999.
Prime Minister Viktor Yushchenko said Ukraine ran a budget surplus of Hr 182 million in the first half of the year, helped by the fact that budget revenues were 2.6 percent above the target for the period. The National Bank said earlier Ukraine’s state budget surplus in the first five months of the year was 1.5 percent of gross domestic product after a 0.5 percent deficit in the same period a year ago. But President Leonid Kuchma blunted enthusiasm by saying the figures were misleading, and that real budget revenues since the start of this year were far below target. Ukraine’s parliament adopted a zero-deficit budget for this year.
FINANCE AND BANKING
In another blow to the troubled Sloviansky Bank, tax police froze all bank securities pending an investigation into a bond scandal, the bank’s press service announced. The government is looking into allegations made by the Crimean government that Sloviansky manipulated bonds placed by one of its affiliate banks for the autonomous republic in 1997. According to a statement released by the bank, the Crimean government alleges that Sloviansky cost the republic’s budget Hr 120 million through the scheme, which, according to earlier reports, involved siphoning proceeds from the bonds offshore. Sloviansky bank is currently being administered by the National Bank of Ukraine while law enforcement authorities investigate criminal fraud charges against many of the bank’s top managers.
Ukraine hopes to receive $370 million in credits from the World Bank by the end of the year, the government said in a statement published in the official daily Uryadovy Kurier. The statement said the government is pinning its hopes on additional funding for two existing loans – $100 million under the Financial Sector Adjustment Loan and $70 million under a coal sector loan – and also hopes to secure $200 million under a new loan.
AGRICULTURE
Ukraine cut its wheat exports to 1.902 million tons between July 1999 and May 2000, from 3.968 million in the same period the previous year, official data indicated. Sunseed exports, meanwhile, fell to 295,300 tons between September 1999 and May 2000, compared to 877,100 tons in the same period the previous year. Belarus, Israel and Turkey are among Ukraine’s major wheat export destinations. Georgia, France and Italy are major sunseed export destinations.
OIL & GAS
Ukraine refined 3.727 million tons (150,000 barrels per day) of crude oil in January to June this year, down from 6.317 million tons in the same period last year, the government said. But refineries increased production in June, processing 892,800 tons of crude, compared to 515,200 tons in May.
TRANSPORTATION
Ukraine wants about 157 million euros ($149.8 million) in loans from the European Bank for Reconstruction and Development and the World Bank to modernize roads, Transport Minister Leonid Kostiuchenko said. The EBRD has already invested some $81.6 million in the country’s transport system. Ukraine needs about Hr 200 million of investment annually to maintain and repair roads, Kostiuchenko said.
SHIPBUILDING
Ukraine’s state-owned Black Sea Shipping Company (BLASCO) has $95 million in foreign debts that the government aims to restructure and pay off by mid-2001, Transport Minister Leonid Kostiuchenko said. Kostiuchenko said the company, which was once the Soviet Union’s biggest and most prestigious shipping company, also had some Hr 220 million in domestic debts. BLASCO ran into trouble after the Soviet Union’s collapse in 1991. Many ships were impounded in foreign ports for unpaid bills. The company is raising money by selling off many of its remaining 130 ships.
