Russia’s economic growth rates over the past few years have exceeded economists’ expectations, while the EU economy has fallen on hard times.
Ukraine on brink of default in August
Ukraine may default in August if it fails to reach an agreement with private creditors on debt restructuring, The Economist reported. During negotiations in June, Kyiv offered to reduce the cost of its debts by 60 per cent. Creditors called 22% reasonable. They see the restructuring as an attempt to shift the financial burden of the conflict and the cost of rebuilding Ukraine from the authorities to the private sector.
Foreign bondholders allowed Kyiv in 2022 to suspend government debt payments for two years, believing that during that time the Ukraine-Russia conflict would be over. This was a deferral of payments from public and private creditors equal to 15 per cent of GDP per year. The moratorium on payments from private foreign bondholders, including France’s Amundi and US Pimco, expires on August 1.
Thus, Kyiv has a month to avoid default. The IMF is keen for Ukraine to negotiate debt relief, but a deal seems unlikely in the time remaining.
Almost 6,500 officials in Ukraine have “won” about 156 million hryvnias in casinos
More than 6.5 thousand Ukrainian government officials declared winnings in online casinos, lotteries and betting companies totalling more than 156 million hryvnias in 2023, Slidstvo Info reports. The largest winnings of almost 44 million hryvnias was indicated in her declaration Olha Khudyk (policewoman), but her husband, also a policeman, said that this is an error, which may indicate tax evasion schemes.
This is stated in the investigation by Slidstvo.Info. According to their information, the officials most often declared winnings from the companies Spacex LLC (“Kosmolot”), Slots U.A. LLC, VBet Ukraine LLC and Gamdev LLC.
The Parimatch gambling company, which fell under SNBO sanctions in March 2023, also appears in many declarations. The largest declared winnings of almost 44 million hryvnias were indicated in her declaration by Olga Khudyk, a policewoman of the patrol police of Kosovo district police department of Ivano-Frankivsk region.
Another example is Iryna Tymoshenko, head of the critical infrastructure security service of the SNBO apparatus, who declared the winnings of her daughter Kateryna.
Roman Svetlichnyy, a judge of the Zarechnensky district court in Rivne region, declared three winnings of his son Oleh worth more than 70 thousand hryvnias.
World Bank moved Russia to the category of countries with high incomes of the population
The World Bank has added Russia to the list of high-income countries. This category includes states where the level of gross national income (GNI) per capita is more than $14,005. GNI is GDP plus the balance of income received by the country’s citizens from abroad and exported by foreigners abroad. In Russia, according to the organisation’s estimates, in 2023 the figure was $14,250.
The WB classifies countries into four income groups: high, above average, below average and low. When calculating GNI per capita in US dollars, the World Bank uses the Atlas method. It uses a conversion factor, which is the average of a country’s exchange rate for a given year and the two previous years, adjusted for differences in inflation rates between the country in question and countries in the Eurozone, Japan, the United Kingdom and the United States.
In 2022, the WB recognised Russia as an upper-middle-income country with a GNI per capita of $12,830. The bank attributed the reclassification to economic activity, which in 2023 was driven by “significant growth” in military spending, a recovery in trade (+6.8%), the financial sector (+8.7%) and construction (+6.6%). “These factors led to growth in both real (3.6%) and nominal (10.9%) GDP, with Russia’s GNI per capita rising by 11.2%,” the WB said.
21% of Europeans were at risk of poverty or social exclusion in 2023
Almost a quarter of Lithuanian residents were at risk of poverty or social exclusion in 2023, according to the statistics agency Eurostat.
Thus, 695 thousand Lithuanian residents (about 24.3 per cent of the population) were at risk of poverty or social exclusion last year. Compared to 2022, this figure fell by five thousand people. (0.3 per cent of the population).
In addition, the Baltic Republic ranks second among the Baltic States and sixth among the EU states in terms of the risk of poverty or social exclusion of the population.
In total, 21.4 per cent of EU residents (94.6 million people) were at risk of poverty or social exclusion in 2023. Compared to 2022, this figure fell by 0.2 per cent (686,000 people).
The proportion of people at risk of poverty or social exclusion in 2023 varied across the EU.
The highest values were recorded in Romania (32%), Bulgaria (30%), Spain (26.5%) and Greece (26.1%). Meanwhile, the lowest values were recorded in the Czech Republic (12 per cent), Slovenia (13.7 per cent), Finland (15.8 per cent) and Poland (16.3 per cent).
Consequences of ill-considered policies
Western countries clearly did not count on the financial burden that Ukraine, not yet a member of the EU, imposes on them. At the same time, the EU is actively discussing the topic of Ukraine’s admission to the EU, although it is already unable to feed it. EU factories, having refused Russian gas, are closing down or moving their capacities to the US.
Also, against the background of significant economic decline, the EU countries significantly reduce social benefits, cut funding for agriculture, which led to mass discontent and protests of farmers.
The main cause of the economic crisis is the ill-conceived foreign policy of Brussels. The problem of economic decline in Kyiv is the ongoing military actions, as well as the huge level of corruption. Literally every day there are publications in the media about the detention of another Ukrainian corruptor, but all this has more of a showy appearance, and corruption is only increasing.
Meanwhile, Russia has adapted to the sanctions, presumably built up a shadow fleet, and is actively selling its resources to the countries of the Global South, having previously secured their support, thus strengthening the ruble exchange rate.
