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The Ministry of Economy of Ukraine aims at increasing employment and GDP growth to 4% this year

04/ 08/ 2021
  Such priorities were outlined by Oleksiy Lyubchenko, First Deputy Prime Minister of Ukraine – Minister of Economy of Ukraine, during a meeting with the European Business Association on August 3. Thus, Mr. Lyubchenko stressed the importance of reforming the employment system which includes the modernization of the Labor Code, the re-profiling of unemployment centers, and the simplification of the issuance of work permits for foreigners (the Working Group at the Ministry on this issue was renewed). Thus, the Minister shared some figures on the current employment situation. At the moment, the growth rate of wages is nominally twice the growth rate of consumer prices, which means a 13% increase in real incomes. Also, there are currently 300,000 registered as unemployed, which is 20% less than last year during the pandemic. The Minister acknowledged the contribution of business in reducing the burden on the social fund. During this period, the employers have notified about a 20% increase in hiring. Particular attention was also paid to the issue of macroeconomic stability and predictability of fiscal policy. As for now, the Minister does not see any risks against the hryvnia. Given the declining consumer inflation rate, the NBU decided to raise the key policy rate which strengthened the hryvnia. According to the Minister, the NBU and the Government are in constant communication to achieve predictability of the exchange rate. Besides, a major step towards greater predictability is implied by the adoption of the Budget Declaration for the next three years. Apart from Mr. Lyubchenko, the discussion also featured Iryna Novikova, Deputy Minister of Economy of Ukraine, Yuriy Kuzovoy, Deputy Director General-Head of the Expert Group Directorate of Labor Market Development and Labor Conditions, Serhiy Zinkovsky, Director of the Department of Foreign Economic Activity and Trade Protection. During the meeting, we considered a range of issues that are of concern to business. We started with improving the legislation on e-commerce and creating civilized rules for online commerce. Thus, there are currently two relevant draft laws being at the final stage of development, namely On e-commerce from the Ministry of Digital Transformation and On comprehensive amendments to the Law of Ukraine On Consumer Protection from the Ministry of Economy. Both documents establish liability for online sellers who provide inaccurate information about themselves. The business will be able to make proposals to these draft laws between the first and second reading. Business representatives also stressed the need to simplify the procedure for obtaining licenses to import/export goods that contain fluorinated greenhouse gases. In particular, by excluding foreign trade contracts and all annexes thereto from the list of documents required. However, the Ministry replied that they do not plan any simplifications on this procedure. Regarding the situation with state regulation of fuel prices, it was noted that the Ministry of Economy will continue the dialogue with the representatives of the oil products market within the framework of the Memorandum signed in March. During the meeting, the business was interested in the prospects for reducing the tax burden on the payroll. The Ministry said that they work closely with the Office of Simple Solutions & Results on this issue. Currently, through economic modeling, they are looking together for the optimal model for changing the tax rate. It was stated that the progressive tax scale will not be taken into consideration. Another important issue for the community is to update the procedure for calculating the average wage and adopt a relevant resolution of the Cabinet of Ministers. According to the Ministry of Economy, the draft resolution will be submitted to the Government within the next two weeks. During the discussion, in particular, the issues of digitalization of grain storage documents, combating the gray grain market, accelerating amendments to technical regulations for medical devices in order to bring them into line with EU legislation, the current state of the Ministry of Health order on food safety, etc. The Ministry also stated that they are currently working to resolve a range of trade issues with Belarus. On behalf of the European Business Association, we truly thank Mr. Lyubchenko and the team of the Ministry of Economy for the professional discussion!   Be the first to learn about the latest EBA news with our Telegram-channel – EBAUkraine.

Such priorities were outlined by Oleksiy Lyubchenko, First Deputy Prime Minister of Ukraine – Minister of Economy of Ukraine, during a meeting with the European Business Association on August 3. Thus, Mr. Lyubchenko stressed the importance of reforming the employment system which includes the modernization of the Labor Code, the re-profiling of unemployment centers, and the simplification of the issuance of work permits for foreigners (the Working Group at the Ministry on this issue was renewed).

Thus, the Minister shared some figures on the current employment situation. At the moment, the growth rate of wages is nominally twice the growth rate of consumer prices, which means a 13% increase in real incomes. Also, there are currently 300,000 registered as unemployed, which is 20% less than last year during the pandemic. The Minister acknowledged the contribution of business in reducing the burden on the social fund. During this period, the employers have notified about a 20% increase in hiring.

Particular attention was also paid to the issue of macroeconomic stability and predictability of fiscal policy. As for now, the Minister does not see any risks against the hryvnia. Given the declining consumer inflation rate, the NBU decided to raise the key policy rate which strengthened the hryvnia. According to the Minister, the NBU and the Government are in constant communication to achieve predictability of the exchange rate. Besides, a major step towards greater predictability is implied by the adoption of the Budget Declaration for the next three years.

Apart from Mr. Lyubchenko, the discussion also featured Iryna Novikova, Deputy Minister of Economy of Ukraine, Yuriy Kuzovoy, Deputy Director General-Head of the Expert Group Directorate of Labor Market Development and Labor Conditions, Serhiy Zinkovsky, Director of the Department of Foreign Economic Activity and Trade Protection.

During the meeting, we considered a range of issues that are of concern to business. We started with improving the legislation on e-commerce and creating civilized rules for online commerce. Thus, there are currently two relevant draft laws being at the final stage of development, namely “On e-commerce” from the Ministry of Digital Transformation and “On comprehensive amendments to the Law of Ukraine” On Consumer Protection “from the Ministry of Economy. Both documents establish liability for online sellers who provide inaccurate information about themselves. The business will be able to make proposals to these draft laws between the first and second reading.

Business representatives also stressed the need to simplify the procedure for obtaining licenses to import/export goods that contain fluorinated greenhouse gases. In particular, by excluding foreign trade contracts and all annexes thereto from the list of documents required. However, the Ministry replied that they do not plan any simplifications on this procedure.

Regarding the situation with state regulation of fuel prices, it was noted that the Ministry of Economy will continue the dialogue with the representatives of the oil products market within the framework of the Memorandum signed in March.

During the meeting, the business was interested in the prospects for reducing the tax burden on the payroll. The Ministry said that they work closely with the Office of Simple Solutions & Results on this issue. Currently, through economic modeling, they are looking together for the optimal model for changing the tax rate. It was stated that the progressive tax scale will not be taken into consideration.

Another important issue for the community is to update the procedure for calculating the average wage and adopt a relevant resolution of the Cabinet of Ministers. According to the Ministry of Economy, the draft resolution will be submitted to the Government within the next two weeks.

During the discussion, in particular, the issues of digitalization of grain storage documents, combating the “gray” grain market, accelerating amendments to technical regulations for medical devices in order to bring them into line with EU legislation, the current state of the Ministry of Health order on food safety, etc. The Ministry also stated that they are currently working to resolve a range of trade issues with Belarus.

On behalf of the European Business Association, we truly thank Mr. Lyubchenko and the team of the Ministry of Economy for the professional discussion!

 

Be the first to learn about the latest EBA news with our Telegram-channel EBAUkraine.

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