Plans and business forecast for 2019
75% of CEOs anticipated development for their business in 2019. 58% of them planned to increase the number of their staff, while 42% planned to increase the salary by 10-20%. The anticipated rates of Ukrainian Hryvnia to US Dollar were at 30 UAH/USD. Such data was received as a result of the research «Business Forecast» conducted by EBA last year. That is to say, the majority of companies indicated that 2019 would be marked by growth. None the less, is there a necessity right now to adjust these predictions? It should be taken into consideration that IMF corrected the prognosis about the growth of the global economy. This issue was discussed on January 29 at the EBA Global Outlook 2019: Shaping the Future.
Before the beginning of the discussion of the plans for 2019, Executive Director of the EBA, Anna Derevyanko, showcased 10 principal achievements, which were important for business during the last 5 years. The list included such achievements as: the establishment of a free-trade zone between the EU and Ukraine, a visa-free regime, the launch of the automatic VAT refund system, the liberalization of the foreign-exchange market, the clearing of the banking sector, the launch of Prozorro and public procurement conducted through this system, the cancellation of price regulations for socially important goods, the launch of a single-window system at customs, the testing of TSA for customs payments, as well as the start of judicial, pension, educational reform and health care reform.
“This is, in fact, an excursion into the past, so that we can look into the future, in order to know what to expect and how to be successful in the year of double elections. In addition, for the first time, we decided to invite a small business representative to a discussion. This is a participant of the EBA project – Unlimit Ukraine. I think it will be interesting to look into the future development of the small business of our state in particular,” added Anna Derevyanko.
General Director of Dragon Capital Tomas Fiala indicated that the inflation is expected to be at 7.5% this year. However, the tendency predicts that it will decrease. Next year, it is projected to be at 6%, and in further future it will be approaching the target of the NBU at 5%. In the last three years GDP has been growing, albeit at a slow pace. The next year its growth is expected to slow down a little bit. However, in general, GDP will grow at the expense of increased consumption. Among the main challenges, Tomas Fiala named the presidential and parliamentary elections, and the economic challenge – budget funding.
Olena Voloshina, the Head of the IFC in Ukraine, stressed that 2019 will be difficult, because the Ukrainian economy is export-oriented and very dependent on external factors. “Therefore, it is important to keep monetary policy and independence of the NBU, to make reforms where possible, to continue the reform of the banking and gas sector. We must progress with land reform, privatization and concession. We should think about how to attract money that is outside the banking system and how to get them back to the financial sector, since they are commensurate with the amounts that we are trying to borrow. We have to create such conditions for young people so that they want to live in our country,” emphasized Ms. Voloshina.
Among the challenges, she named the shadow economy and migration of labor resources. She advised to face such challenges through partnership, and through effectively building your business processes. And right now, cool projects are being born at the junction of fields, for example, agri-tech, and agro-IT.
Director-General of ING Bank Ukraine Saida Djarbolova emphasized that 2019 will feature a not-very-good combination: a slowdown of world growth, payments of external debt, and inadequate enabling environment for global markets. However, the banking sector does not expect significant upheavals and looks towards the future with confidence. She emphasized that, for the acceleration of economic development, it is necessary to establish a domestic capital market, which is almost completely absent at the moment. So business will welcome the actions of the authorities in this context. After all, according to the preliminary estimates of the experts, the household saving rates significantly exceed the liquidity of the banking system, which fluctuates around 100 billion UAH.
For their part, General Director of Mastercard Europe SA in Ukraine, Inga Andreieva, noted that financial inclusion will be really important in 2019. That is, the involvement of the population of the country in the financial system. In turn, an increase in financial inclusion by 10% will lead to an increase in the country’s GDP by 0.3%, which amounts to more than UAH 9 billion for Ukraine. She also added that Ukraine is currently among the world’s leading countries in the number of NFC transactions (contactless payments using mobile phones, etc.).
General Director of Metro Cash and Carry Ukraine, Olivier Langlet, has highlighted the positive expectations for 2019. At the same time, he noted that new business tools should be sought for business development. For example, for the Metro network it means an online consumer solution.
General Director of Swisspan Limited, Bogdan Tsuprik, was more reserved in his predictions. He stressed that to maintain the level of development of the previous year would be already a success for 2019.
Small business at EBA Global Outlook was represented by co-founder of Woolkrafts, Oleg Mikhailov. He stressed that they had positive expectations for 2019, and noted that the key to small business development is the understanding of value. In Europe, small businesses account for about 40%. In Ukraine, in recent years, there is also a positive trend. So, hopefully, we will keep to this trend in the future as well.
In general, we can say that the business does not expect something significantly different from what EBA Business Forecast had predicted, and that the main recommendation for 2019 is to hold the ground.
You can listen to the audio recording of the meeting below.