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Rating agency «IBI-Rating» has affirmed the credit rating of Cherkassy city at uaВВВ grade
17.10.2017
Rating agency «IBI-Rating» informs on affirming of the credit rating of Cherkassy city at uaBBB grade, keeping the «stable» outlook.
The credit rating of Cherkassy city reflects its importance as a regional center, diversified economic complex of the city, which contributes to the rapid recovery of sources of filling of the city budget revenues, as well as to an increase in budget revenues.
The development of Cherkassy city in the first half of 2017 continued to be influenced by political and economic instability in the country, although a gradual recovery is observed in a number of segments of the economy this year.
In the current year negatively on the development of the city's economy was affected by the forced downtime of the major enterprise and taxpayer in the budget of the city - PJSC «Azot», which resulted from a reduction in the supply of natural gas, which is the main raw material for production. This situation caused an increase of 12.9 times to UAH 87.4 million debt on payment of wages in the city and to a decrease of 18.3% to UAH 11.3 billion the volume of sales of industrial products in relative prices, as well as to reduce export operations. Part of the decline in industrial production was offset by enterprises of other industries.
In the period under review, were observed further growth of capital investments and a positive increase in foreign direct investment. Despite this, some of the indicators of social and economic development continue to meet or exceed the average for the country per capita, including the indicator of budgetary provision, which in the first half of 2017 was corresponded the average for Ukraine.
By results of January-June 2017, the amount of Cherkassy city budget revenues grew as compared with the same period of 2016 by 1.5 times and amounted to UAH 1,555.1 mln, which was facilitated by an increase in tax revenues (+ 30.6%) and non-tax revenues (+11.7%), revenues from official transfers (+70.3%). In the mentioned period, Cherkassy city budget was consolidated with a surplus in the amount of UAH 19.1 mln versus 105.8 mln a year earlier.
The increase in budget indicators is accompanied by support at a low level of the direct debt burden on the revenue side of the city budget, which as of 01.07.2017 was 6.7% against 9.4% as of 01.01.2017. As of 01.07.2017, the ratio of consolidated debt to city budget revenues, excluding transfers for 2017, is 32.8%, which is 16.5 percentage points lower than the indicator as of 01.01.2017 and is moderate.
A positive impact on the credit rating may have, as follows: increased revenues of Cherkassy city budget and improvement of most indicators of social and economic development in the city per capita. A negative impact on the credit rating may have, as follows: decreased budget revenues indicators, reduction in liquidity, a substantial increase of debt obligations, deterioration of the borrowings market conditions or limiting of the access to it for municipal formations.
In order to conduct the analytical research the materials obtained from Cherkassy city were used, including: indicators of social and economic development, materials of statistical bulletins; annual treasury statements, program materials, other necessary internal information, as well as the information from the public sources, which the Rating agency considers reliable.
Municipal department
For more information please contact:
Press service of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua
The credit rating of Cherkassy city reflects its importance as a regional center, diversified economic complex of the city, which contributes to the rapid recovery of sources of filling of the city budget revenues, as well as to an increase in budget revenues.
The development of Cherkassy city in the first half of 2017 continued to be influenced by political and economic instability in the country, although a gradual recovery is observed in a number of segments of the economy this year.
In the current year negatively on the development of the city's economy was affected by the forced downtime of the major enterprise and taxpayer in the budget of the city - PJSC «Azot», which resulted from a reduction in the supply of natural gas, which is the main raw material for production. This situation caused an increase of 12.9 times to UAH 87.4 million debt on payment of wages in the city and to a decrease of 18.3% to UAH 11.3 billion the volume of sales of industrial products in relative prices, as well as to reduce export operations. Part of the decline in industrial production was offset by enterprises of other industries.
In the period under review, were observed further growth of capital investments and a positive increase in foreign direct investment. Despite this, some of the indicators of social and economic development continue to meet or exceed the average for the country per capita, including the indicator of budgetary provision, which in the first half of 2017 was corresponded the average for Ukraine.
By results of January-June 2017, the amount of Cherkassy city budget revenues grew as compared with the same period of 2016 by 1.5 times and amounted to UAH 1,555.1 mln, which was facilitated by an increase in tax revenues (+ 30.6%) and non-tax revenues (+11.7%), revenues from official transfers (+70.3%). In the mentioned period, Cherkassy city budget was consolidated with a surplus in the amount of UAH 19.1 mln versus 105.8 mln a year earlier.
The increase in budget indicators is accompanied by support at a low level of the direct debt burden on the revenue side of the city budget, which as of 01.07.2017 was 6.7% against 9.4% as of 01.01.2017. As of 01.07.2017, the ratio of consolidated debt to city budget revenues, excluding transfers for 2017, is 32.8%, which is 16.5 percentage points lower than the indicator as of 01.01.2017 and is moderate.
A positive impact on the credit rating may have, as follows: increased revenues of Cherkassy city budget and improvement of most indicators of social and economic development in the city per capita. A negative impact on the credit rating may have, as follows: decreased budget revenues indicators, reduction in liquidity, a substantial increase of debt obligations, deterioration of the borrowings market conditions or limiting of the access to it for municipal formations.
In order to conduct the analytical research the materials obtained from Cherkassy city were used, including: indicators of social and economic development, materials of statistical bulletins; annual treasury statements, program materials, other necessary internal information, as well as the information from the public sources, which the Rating agency considers reliable.
Municipal department
For more information please contact:
Press service of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua