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remained on the temporarily occupied territory in the city of Oleshki in the Kherson region, is not working. However, all company employees are receiving their salaries.
German media notes the return of private investors to Ukraine. As the Frankfurter Allgemeine Zeitung notes, the Swiss corporation, Nestlé, plans to invest €40M in expanding an instant noodle factory. The Irish company, Kingspan, will build a new plant in Ukraine worth €200M within five years. The German giants Bayer AG and Fixit have also announced million-dollar investments. The Philip Morris tobacco corporation recently announced its intention to build a new $30M cigarette factory near Lviv. "This investment is a signal of confidence in the Ukrainian economy," said the president of the European region of Philip Morris International. According to the publication, many German companies are also on alert. For example, Knauf, the building materials manufacturer, lost its facility in the Donetsk region, in which it had invested €200M. Knauf plans to build a new factory in Ukraine and is considering participating in reconstructing social facilities.
6.0 Public Sector 6.1 Budget
Ukraine's state budget this year is funded with the allies' help. According to the Ministry of Finance, the 2023 Ukrainian budget is largely financed by military bonds, loans from international financial organizations, bilateral loans, and grants. So, as of August 4, the largest sources of funds are macro-financial assistance from the European Union for $11.4B; domestic state bonds - $9.2B; grants from the US - $8.5B; funds from the International Monetary Fund as part of the extended financing program - $3.6B; and preferential financing from Canada - $1.7B. The total external funding in 2023 is $28B.
The National Bank expects the state budget deficit to grow next year. In July, the regulator lowered its forecast for this indicator to 16.8% of GDP. Thus, considering grants, it is predicted that the consolidated budget deficit will reach UAH 1.28T. In the April report, the forecast was 10.5% of GDP, or UAH 811B. The prognosis for the consolidated budget deficit, including grants, in 2025 was increased to UAH 883B or 10.0% of GDP. As for the state debt, given the significant budget deficits that have existed for several years, their financing mainly with debt, and the decrease in grant support in the medium term, state debt will approach 100% of GDP, the state bank reported. The NBU explained that it increased the debt-to-GDP ratio in this forecast compared to the previous one due to a revision of assumptions about the size of deficits upwards and grant support downwards in 2024-2025. Thus, the NBU expects the national debt to increase from 78.4% of GDP to 84.6% of GDP this year, to 96.6% of GDP next year, and 98.2% of GDP in 2025.
The war costs Ukraine about UAH 2T per year. "Supporting the Armed Forces of Ukraine and confronting Russia in the war it unleashed costs our state about 2 trillion hryvnias," said Prime Minister Denys Shmyhal at a conference of Ukrainian ambassadors. The minister noted that "This is more than the revenue for the peacetime budget." According to him, in peacetime, the revenue that funded Ukraine's budget amounted to 1.3T hryvnias.
39 UKRAINE Country Report September 2023 www.intellinews.com