What is the current economic situation in Ukraine

General economic situation in Ukraine

To summarize analyses produced by the National Bank of Ukraine[1]:

In December 2020, despite the destruction of the epidemic situation and  lockdowns in some countries, prices on commodity markets, especially for oil and natural gas have started to rise  (see Figue 3.1). Prices for natural gas are also rising because of cold weather in the northen hemosphere. 

Increased industrial activites in the world increased  demand for steel and iron ore. The world stock of steel were too low and the expectations of supply for iron  ore from Brazil were too low. This created a “jump” in the prices for steel products in December, 2020.

The prices for grains were remaining high because of the destruction of harvest forecasts for Latin America and the introduction of limits on exports by some countries. On the world financial markets, the interest to risky assets growth due to the end of election period in USA, expectations of new fiscal stimulus in USA and continued monetary stimulus from the Federal reserve system and the Central Banks. As a result a large number of currencies were strengthened relative to US dollar.

In November, 2020 the growth in prices for manufactured goods  accelerated rapidly (to 8.6% yoy). Prices for Ukrainian exports, such as chemical industry products, metallurgical and agricultural products increased and also internal prices for energy and electricity.

In November the Index of production for basic goods and commodotes grew by 3.3% yoy. This happened for the first time since October of the previous year. The decline in manufacturing products decreased(to 0.3% yoy) due to favorable conditions in world markets for Ukrainian exports, where prices of metals and agricultural products increased with increased demand. The harvest of late cereals and other crops (like soya) led to the resumption of high growth rates in agriculture (by 11.3% yoy).

 Oil and gas prices

Major metals and agricultural products prices

According to the Government Seaport Administration[2] in 12 month of 2020 total reloading of metals in Odessa seaport was 5 934,3 th tons. This is the highest turnover for the last 10 years, and 28.7% more than results in 2019.

Total reloading amount of grains in 2020 is 48 million  tons. This is 6.61 million tons  t less than in 2019 – 12.1%. The reason the total amount of grain exports went down is because of bad weather for agriculture in Ukraine in 2020. In fact, total export revenue increased in 2020 because world market prices increased. Unfortunately, Ukrainian agricultural producers simply did not have enough grains to supply the market.

[1] [1] https://bank.gov.ua/admin_uploads/article/%D0%9C%D0%9C_2019_12.pdf?v=4


[2] http://uspa.gov.ua/ru/press-tsentr/novosti/novosti-ampu/18230-rekord-v-odesskom-portu-za-proshlyj-god-peregruzheno-pochti-6-mln-tonn-metalloproduktsii