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routes, frontline movement, the number and consequences of missile strikes on Ukraine, the duration of air alerts, and the number of refugees and returnees as key factors in their GDP estimates. Concorde also estimates that inflation will reach 33-36% this year.
As for the budget, the company forecasts Ukraine’s expenses in the second half of 2022 at UAH 1.62 trillion. Ukraine will cover only 30% with its resources, so the financing needs will remain at $5bn per month.
Ukraine’s trade is also a problem after it fell by 40% y/y since the start of the war, although it has started to recover in recent months. The trade balance was deeply negative in April-June but was recovering strongly in August and September.
2.0 Politics
2.1 Naftogaz to sue Gazprom over non-payment of fees
Naftogaz, Ukraine’s state-run oil and gas company, filed a Request for Arbitration with the International Court of Arbitration of the International Chamber of Commerce in Paris regarding the actions of Gazprom, Russia’s largest energy company, Naftogaz said in a press statement on September 9.
“Naftogaz demands that Gazprom pay for the rendered service of organising natural gas transportation through the territory of Ukraine. Funds were not paid by Gazprom, neither on time nor in full,” the company stated.
Yuriy Vitrenko, head of Naftogaz, referenced the 2019 “take or pay” contract signed by Gazprom and mentioned that Russia has been “pumping and paying less” than the agreement specifies. This comes after Russia reduced gas transport through Ukraine in May when Gazprom halted the gas flow from the occupied Sokhranivka gas metering station (GMS) in the Donbas region. He demanded that Gazprom pay in full, in accordance with the contract.
“We will use our experience of winning against the Russians in arbitration and make them pay this time as well,” Vitrenko wrote on Facebook. “However, this is only the beginning, Naftogaz is evaluating the possibility of declaring additional conditions.” Naftogaz previously sued Gazprom in 2018 in a four-year legal battle over gas supply contracts. The Arbitration Institute of the Stockholm Chamber of Commerce ordered Gazprom to pay $2.9bn ($2.56bn plus interest) to Naftogaz for the failure to meet gas transit obligations.
“We need not only to win the war against Gazprom, but also to defeat Russia in its war of aggression against Ukraine. And although arbitration is always a difficult and long process, I believe that Naftogaz will repeat the success of Stockholm-2019. And Ukraine will definitely win too,” Vitrenko stated.
The venue for arbitration is Zurich, Switzerland.
Reports that Nafotgaz was preparing to sue Gazprom were published in June. The general director of Ukraine’s gas transportation system (GTS), Serhiy Makogon, accused Gazprom of not paying for transit in June in full.
6 UKRAINE Country Report October 2022 www.intellinews.com