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IBI-Rating has affirmed the credit rating and rating of investment attractiveness of Vinnytsia city

17.07.2019
National rating agency IBI-Rating informs on affirming of the credit rating of Vinnytsia city at uaA grade, keeping the«stable» outlook and the rating of investment attractiveness at invA+ grade.

Such rating grades represent the high investment attractiveness and strong ability of the city to pay off its financial commitments. The «stable» outlook, with the highest probability, implies immutability of the rating on the horizon for 12 months.

Were taken into account:

1. The structure of the economic complex of the city and the dynamics of its key indicators

Vinnytsia has a diversified economy, which ensures stable revenues to the budget. In 2018, there was a further growth in a number of indicators of socio-economic development: the industrial products sold grew by 16.6% to UAH 31.5 billion, and the used capital investments rose by 20.6% to UAH 5.0 billion; retail trade turnover - by 14.4% to UAH 7.7 billion, foreign trade turnover - by 34.7% to USD 1.43 billion, the volume of construction work performed - 2.0 times to UAH 4.5 billion. In 2018, in the city was commissioned 113.5 thousand m2 of housing, which in 48% more than in the corresponding indicator in Ukraine per 1 inhabitant. In general, most indicators of the economy and the economic complex of the city (including in terms of per capita) exceed the average data for the country.

2. Competitive advantages and disadvantages in comparison with other cities of the country

In Vinnytsia are localized the key institutions of government of the region. In addition, the city has good logistics, a significant number of educational institutions (for different profiles) and a developed service, utilities and social infrastructure. Business competition and labor resources price are lower compared to the capital. At the same time, the active involvement of local and foreign investments, as well as the policy of maximum transparency in relation to business by local authorities, has a positive effect on the investment climate in the region, as well as on the economic, labor and social potential of the city.

3. Financial policy efficiency and the budget indicators

According to the results of 2018, city budget revenues was increased by 9.4% to UAH 4.7 billion, which was ensured by the growth of revenues from own sources by 22.2% to UAH 2.7 billion while reducing by 4.0% to UAH 2.0 billion - transfers from higher level budgets. The share of tax revenues in the structure of the city budget was 49.2%; such revenues are diversified by payers and industries, which ensures relative stability and predictability of budget revenues. The level of fiscal security continues to exceed the national average and in 2018 amounted to UAH 7.3 thousand. The city budget remains a donor budget, transferring a reverse subsidy to the state budget - UAH 81.8 million in 2018, against UAH 46.9 million in 2017. In 2018, the city budget was executed with a surplus of UAH 90.7 million, despite the growth in capital expenditures, which amount to a quarter of the city budget expenses.

4. The sensitivity of the budget and the city economy to the impact of negative factors

The city has a need to attract additional funding, including for modernization of urban infrastructure and housing and communal services, which leads to an increase in the volume of consolidated debt 2018, the city authorities did not enter in the borrowing market and have intentions to attract loan funds in 2019. In the case of implementation of plans to attract loans, the consolidated debt burden at the end of this year will be within 9%, which corresponds to a low level of debt burden. According to the Agency, the impact of negative factors on the economy and financial viability of the city remains moderate - the city’s economic complex remains quite diversified and is sufficiently adapted to the risks posed by the military conflict in eastern Ukraine and the introduction of trade restrictions between Ukraine and the Russian Federation.

In order to conduct the analytical research, the materials obtained from Vinnytsia city have been used, including: indicators of the social and economic development, statistical data, treasury statements, program materials, other necessary internal information, as well as the information from the public sources, which the Rating agency considers credible.

Municipal department
For more information please contact:
Press service of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua