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Rating agency «IBI-Rating» has affirmed the credit rating of Vinnytsia city at uaА- grade keeping the «positive» outlook
09.01.2018
«IBI-Rating» informs on affirming of the credit rating of Vinnytsia city at uaА- grade with the «positve» outlook.
The affirmed grade of the credit rating of Vinnytsia city is due to significance of the city as a regional centre of Ukraine, its highly diversified economic complex contributing to the rapid recovery of sources of filling of the city budget revenues, as well as a moderate level of the consolidated debt burden on the city budget given a regular schedule of servicing and repayment of the debt.
The «positive» outlook is due to the expectation of continued steady growth of key indicators of the city's social and economic development and revenues to the budget of Vinnytsia while maintaining a moderate level of debt load.
The development of Vinnytsia city in 2017 continues to be influenced by the general situation in the economy of a country which is under reconstruction and in conditions of political instability. Given this process, against the background of growing average monthly wages and reducing arrears on payments thereof, a decrease in the number of available population was observed in the city and the average number of full-time employees. The dynamics of the city's economy for the second consecutive year is accompanied by an increase in the volumes of sales of industrial products, including exports, capital and foreign direct investment, construction works and retail trade turnover.
The mentioned trend, actions on decentralization, as well as a widened circle of payers of taxes and fees to the local budget, enabled Vinnytsia city to continue to increase the budget revenues, as well as to keep the indicator of the budget provision at a higher level than the average level in Ukraine while maintaining a low level of concentration of budget revenues by payers.
According to the results of the first half of 2017, the volume of budget revenues increased by 40.1% as compared with the same period of 2016, amounting to UAH 1 952,1 mln. This was facilitated by an increase in tax revenues by 38.4% to the amount of UAH 855.4 mln and non-tax revenues by 62.4% to the amount of UAH 145.4 mln, income from capital transactions by 27.3% to the amount of UAH 17.6 mln, as well as transfers from higher level budgets by 39.3% to the amount of UAH 929.4 mln. The budget of Vinnytsia city was consolidated with a surplus in the amount of UAH 52.9 mln, versus UAH 85.0 mln in the previous year. The decrease in this indicator is due to an increase in the local budget expenditures by 45.2% to the amount of UAH 1 899.2 mln, growth of the capital expenditures up to UAH 338.3 mln or in 1,7 times.
The city maintains a high level of depreciation of fixed assets, including housing stock, engineering and transport infrastructure facilities, hence the need for significant capital investments in the local infrastructure. Sources of financing of capital investments in the short-term perspective will also be loan funds from international financial institutions, which will have an impact on the dynamics of the indicator of consolidated debt burden on the budget revenues. During the first half of 2017 the consolidated debt of the Vinnytsia City Council decreased by 10.2%, amounting to UAH 107.2 mln, as at 01.07.2017. The ratio of the city’s consolidated debt to the city budget revenues for 2017 (net of transfers) accounting for 5.5% as at 01.07.2017, being an acceptable value.
A positive impact on the credit rating may have, as follows: a further increase in the budget revenues of Vinnytsia city and improvement of most indicators of the social and economic development of the city per capita. A negative impact on the credit rating may have, as follows: decreased indicators of the budget revenues, reduced liquidity, increased debt liabilities.
In order to perform the analytical research the materials obtained from Vinnytsia city have been used, including: treasury reporting, target indicators of the city social and economic development and the city budget for the first half of 2017, statistics data, other necessary internal information, as well as the information from the public sources, which the Rating agency considers credible.
Municipal department
For further information please contact:
Press service of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua
The affirmed grade of the credit rating of Vinnytsia city is due to significance of the city as a regional centre of Ukraine, its highly diversified economic complex contributing to the rapid recovery of sources of filling of the city budget revenues, as well as a moderate level of the consolidated debt burden on the city budget given a regular schedule of servicing and repayment of the debt.
The «positive» outlook is due to the expectation of continued steady growth of key indicators of the city's social and economic development and revenues to the budget of Vinnytsia while maintaining a moderate level of debt load.
The development of Vinnytsia city in 2017 continues to be influenced by the general situation in the economy of a country which is under reconstruction and in conditions of political instability. Given this process, against the background of growing average monthly wages and reducing arrears on payments thereof, a decrease in the number of available population was observed in the city and the average number of full-time employees. The dynamics of the city's economy for the second consecutive year is accompanied by an increase in the volumes of sales of industrial products, including exports, capital and foreign direct investment, construction works and retail trade turnover.
The mentioned trend, actions on decentralization, as well as a widened circle of payers of taxes and fees to the local budget, enabled Vinnytsia city to continue to increase the budget revenues, as well as to keep the indicator of the budget provision at a higher level than the average level in Ukraine while maintaining a low level of concentration of budget revenues by payers.
According to the results of the first half of 2017, the volume of budget revenues increased by 40.1% as compared with the same period of 2016, amounting to UAH 1 952,1 mln. This was facilitated by an increase in tax revenues by 38.4% to the amount of UAH 855.4 mln and non-tax revenues by 62.4% to the amount of UAH 145.4 mln, income from capital transactions by 27.3% to the amount of UAH 17.6 mln, as well as transfers from higher level budgets by 39.3% to the amount of UAH 929.4 mln. The budget of Vinnytsia city was consolidated with a surplus in the amount of UAH 52.9 mln, versus UAH 85.0 mln in the previous year. The decrease in this indicator is due to an increase in the local budget expenditures by 45.2% to the amount of UAH 1 899.2 mln, growth of the capital expenditures up to UAH 338.3 mln or in 1,7 times.
The city maintains a high level of depreciation of fixed assets, including housing stock, engineering and transport infrastructure facilities, hence the need for significant capital investments in the local infrastructure. Sources of financing of capital investments in the short-term perspective will also be loan funds from international financial institutions, which will have an impact on the dynamics of the indicator of consolidated debt burden on the budget revenues. During the first half of 2017 the consolidated debt of the Vinnytsia City Council decreased by 10.2%, amounting to UAH 107.2 mln, as at 01.07.2017. The ratio of the city’s consolidated debt to the city budget revenues for 2017 (net of transfers) accounting for 5.5% as at 01.07.2017, being an acceptable value.
A positive impact on the credit rating may have, as follows: a further increase in the budget revenues of Vinnytsia city and improvement of most indicators of the social and economic development of the city per capita. A negative impact on the credit rating may have, as follows: decreased indicators of the budget revenues, reduced liquidity, increased debt liabilities.
In order to perform the analytical research the materials obtained from Vinnytsia city have been used, including: treasury reporting, target indicators of the city social and economic development and the city budget for the first half of 2017, statistics data, other necessary internal information, as well as the information from the public sources, which the Rating agency considers credible.
Municipal department
For further information please contact:
Press service of IBI-Rating
(044) 362-90-84
press(at)ibi.com.ua