Michael MacKay, Radio Lemberg, 22.12.2018
The year end is bringing a spate of good news about the Ukrainian economy. It has been less than five years since the end of corrupt Yanukovych Clan, and in all that time Ukraine has been fighting a war of national salvation against invasion by the Russian Federation. Nevertheless, there is positive news about economic health and stability in Ukraine.
The International Monetary Fund approved a new Stand-By Arrangement for Ukraine on December 18. On December 21, the press service of the National Bank of Ukraine reported that the first tranche of $1.4 billion was received. This ‘backstop’ will give Ukraine better macroeconomic stability, which will be especially important because 2019 is an election year.
Ukrainians are earning more money and paying more in taxes. ”Over the [first] 11 months, state budget revenues grew by UAH 118.8 billion, or 16.4%, compared to the same period in 2017 and amounted to UAH 843.3 billion," the press service of the Ukrainian Finance Ministry reported. 843.3 billion hryvnia is equivalent to 30.54 billion U.S. dollars at today’s exchange rate.
The black market remains too large in Ukraine, and this deprives the treasury of revenue through taxation. Ukraine’s shadow economy made up 32% of the GDP in the first half of 2018. There was, though, a three percent drop from the corresponding period in 2017. This was reported by the press service of the Economic Development Ministry of Ukraine.
The banking sector of Ukraine returned to profitability for the first time since 2013, the year before the Russian Federation began its war against Ukraine. Banks made a profit of 15 billion hryvnia, or $540 million in the first three quarters of 2018.
Ukraine's central bank, the National Bank of Ukraine, projects that for the first time since 2013 foreign exchange reserves will exceed $20 billion in 2019.
Travel and tourism is contributing to the Ukrainian economy substantially. More foreign visitors are coming to Ukraine. The State Border Service of Ukraine reported that, in 2018, 27 million foreigners crossed the border.
Air traffic is booming. Ukraine exceeded 20 million air passengers through its airports in 2018. This figure is double what it was in 2015. More people are travelling to and within Ukraine because the economy is doing better, because their is increased competition among airlines, and because there is visa-free reciprocity between Ukraine and the European Union.
Ukrainians made a fateful decision to set out on a path to Europe and never turn back. Euro-Atlantic integration is proceeding in Ukraine because of the Revolution of Dignity of 2013-14 and because of implacable resistance to Russian aggression since 2014. Even though the Russian Federation is waging war to annihilate Ukraine, the Ukrainian economy is not only in recovery but is on the cusp of a boom.