“Brought the situation”: Cabinet Groisman went on vacation

«Довели ситуацию»: Кабмин Гройсмана ушел в отпуск

Expensive water, bread, electricity, reduced reserves, and the government has shown zeal, only borrowing money, experts say. Allegedly, the Ministers brought up the fact that the Ukrainian economy has virtually ceased to earn, and citizens headed abroad.

“Worse than social tensions”

International reserves of Ukraine in July decreased by 1.3%, or 229,7 million dollars, amounting on August 1 of 17.75 billion. About it reports a press-service of the National Bank. The cause of reduction of reserves, the NBU first call payments on the public debt in foreign currency.

So, in July for the servicing and repayment of public and publicly guaranteed debt in foreign currency was sent to 321,5 million dollars. And before the end of the year the country will have to pay another 1.75 billion dollars to foreign creditors. At first glance, the reserves should be enough, but experts say that if the debt to execute without outside assistance, the amount of reserves will fall below the critical level of 3 months of future imports. Which means that the country will not be able to place Eurobonds.

Authorities more than a year awaiting the disbursement of a tranche of the International monetary Fund (IMF) in the amount of 1.9 billion dollars. But the IMF agreed to provide money under the condition that the Ukrainian government will raise the gas price for population to the level of imports. Experts say that if Ukrainian government will go with that, such a step could lead to social tensions. And it is politically profitable in the first place, Vladimir Groisman.

“On the other hand, the increase in payments for gas will reduce the state budget deficit. And the government should understand the consequences of non-receipt of the tranche, without which, most likely default. And it’s worse than social tension,” – said on television the Managing partner of the leasing company Sergey Vaskov.

However, the Cabinet postponed the decision of problems until 1 September. While the government generally stopped going to meetings. As a rule, they are held on Wednesdays. But the last Cabinet meeting took place on 26 July. Sessions 1 and 8 August have been cancelled. According to media reports, at least 7 members of the government are on vacation. It is not clear will there be a meeting on 15 August. As part of the Cabinet members is on vacation until August 17.

While the government was on vacation, it turned out that the expenses of the state budget of Ukraine for the first half of 2018 exceeded revenues by 9.78 billion.

The shortfall was covered by the fact that the Ministry of Finance has borrowed UAH 10 billion by issuing bonds of internal state loan.

In addition, the Ministry has taken for the government 130.7 million dollars for 105 days under 5.5% per annum through the placement of short-term bonds in U.S. dollars. And from the offering of dollar bonds with a maturity of 203 days received 56,4 million dollars at a rate of 5.9%.

The founder of “Kiev stock center” Alexander Goncharov notes: “This zeal of the authorities to borrow in any currency clear, because according to the Treasury Single Treasury account at the beginning of August was only 1.99 billion hryvnia.”

Goncharov notes that it is 7.4 billion less than the previous month, and 22 times less than in the same period last 2017 (by the way, was 44 billion). Accordingly, according to official data for 7 months of the current year, a plan for the implementation of the budget revenues fell more than 16 billion UAH, – the expert emphasizes.

Time of emigration: more expensive water, electricity, bread

Alexander Goncharov believes the false hope that the Cabinet Groisman will be able to recover financial losses. “These Ministers have brought the situation to the fact that the Ukrainian economy has virtually ceased to earn, and the government only spends and wants to borrow money from everywhere already”, – the expert wrote in Facebook.

He asks: “If we’re good, why out of the country more and more people go to work, labor migration is growing at a record pace?”. The expert recalled that in 2016 the amount of funds received by Ukraine from migrant workers increased by 8% in 2017 and by 24% for the first half of 2018 – at 31%.

In total, over the last 2.5 years, Ukraine has received from labour migrants 22 billion, 11 times the amount of loans from the IMF during the same period.

However, the national Bank (NBU) says that the mass departure of migrant workers abroad may accelerate inflation and slow economic growth. The NBU noted, that now the entrepreneurs stated the lack of qualified personnel.

Note that according to official data of the state employment service, working abroad about 5.5 million Ukrainians. According to research by sociologists, the main reason for labor migration is the wage level.

The state statistics service published a report on the size of the average nominal wage. As of the first half of 2018, he made 8 225 hryvnia, which is by 26.7% more than in the same period last year.

However, the average Ukrainian spends 1.5 times more money to the payment of utility bills from the monthly income than a resident in the EU. Ukrainians give to communal to of 34.07%. While the European average expenditure on housing is 24.4%.

Dengue and the rest go to food and essential goods. So, according to PrivatBank, which serves almost 20 million active cards in 2018 in the structure of expenses the largest share (46%) are in grocery stores and supermarkets. While the costs of clothing, shoes are 10% on the goods for the house and furniture is 8% for home appliances and computers 8%, and on medicines and medicine — 8%…

More expensive almost all. So the Vice-President of the Association of vodokanals of Ukraine Olga Babiy, recently reported that the company “Dniproazot” increased the price of chlorine with 11 thousand UAH to 47,25 thousand UAH with VAT per ton – nearly five times.

“The increase in the price of chlorine will affect every consumer in Ukraine, because due to the increase in the cost of chlorine cost of water will rise at least 2-3% irrespective of size of cities”, – said Babiy.

Note that the cost of chlorine in the water tariff is 2%. But the cost of water is included in most goods and services. Also their prices include the price of electricity.

And in the national Commission, carrying out state regulation in spheres of power and utilities (NKREKU), approved the increase in average annual electricity tariffs. The prices will grow on 1,5%, will be introduced in 2018.

At the same time, a third of the bread can rise. According to the President of the Association of farmers and private landowners Ivan Tomich, in some regions the rains interfere with the harvest. “If I have previously given forecasts that the bread will rise in price throughout the year until the next harvest by a quarter, taking into account the new adjustments we can expect the growth of prices for bread until the next harvest by 30-35%,” says Tomich.

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