Page 26 - Ukraine OUTLOOK 2024

The share of IT exports exceeds pre-war indicators by about 3% in 2023.
IT services account for 40% of Ukrainian service exports. For comparison, the share of IT export services was almost 45% in 2022 and 37% in 2021, according to the Prime Minister of Ukraine, Denys Shmyhal. After the start of the full-scale war last year, the IT industry became the only area of Ukrainian exports that grew. This year, the situation has changed for IT, and according to the available data, the share of IT exports in 2023 has decreased by about 5% compared to 2022. A study by IT Research Ukraine finds that in 2023 Ukrainian exports of IT services may have decreased by 2.3-7.7% compared to 2022. The volume of Ukrainian IT export sales in 2021 amounted to $6.94bn; in 2022 it was $7.35bn, and in 2023 it is projected to be $6.78-$7.18bn.
Grain exports
Ukraine has collected 78.7mn tonnes of new harvest and expanded its agricultural exports to the EU by 11% in 2023. As of the third week of December, farmers in all regions of Ukraine have threshed 78.7mn tonnes of grain and oil crops, 57.86mn tonnes and 20.76mn respectively. Compared to data from the same date a year ago, the total harvest is higher by 23.6%, particularly grain by 24.2% and oil by 22.1%.
However, it is worth considering that in 2023 corn has been harvested from 88% of the total sown area, while a year ago the figure was only 75%.
Meanwhile, according to the European Commission's report on EU agricultural trade, Ukraine increased agricultural exports to the EU from January to September by 11% (up to €8.75bn) compared to the same period in 2022. It remained in third place among the largest suppliers of agricultural products to the EU after Brazil and the UK. During the same period, Ukraine imported €2.505bn worth of farm products from the EU (+19% over 2022).
Dragon Capital is being cautious and does not expect a full recovery of shipping through the Black Sea ports in 2024 after it collapsed in July 2023.
Ukraine has successfully set up a temporary corridor for seaborne grain exports, a crucial source of foreign exchange earnings, that has been strangled after Black Sea Grain Initiative collapsed on July 17.
Dragon Capital estimates that at least 46 ships carrying a total cargo capacity of 1.85mn tonnes have entered Ukrainian Black Sea ports in the last quarter of 2023. The majority of these vessels arrived at the ports of Odesa in October, loaded with goods traditionally shipped by sea, including agricultural and industrial products.
Analysts believe that a full resumption of transportation through the Black Sea ports could boost export revenues by $9-10bn in 2024, resulting in a positive impact on real GDP growth of up to 5 percentage points. However, it could also lead to a rise in inflation due to secondary effects on domestic grain prices, potentially increasing it by an additional 2.5 percentage points, NV reports.
Despite the potential for economic growth, the ongoing hostilities pose a risk to ships sailing to Ukrainian ports in the Black Sea. Although Ukraine’s farmers brought in a bumper harvest this year, grain exports in recent months are down by a third and many agricultural enterprises are loss-making as a result.
26 UKRAINE OUTLOOK 2024 www.intellinews.com