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IBI-Rating has affirmed the credit rating and rating of investment attractiveness of Vinnytsia city
14.01.2020National 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 the first half of 2019, against the corresponding period of the previous year, there was a further growth in a number of indicators of socio-economic development: the industrial products sold grew by 17.1% to UAH 17.4 billion, the disbursed capital investment rose by 31.3% to UAH 2.3 billion; retail trade turnover - by 22.9% to UAH 4.7 billion, foreign trade turnover - by 7.7% to USD 718.8 million, the volume of construction work completed - almost in three times to UAH 3.4 billion. 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, the key state authorities of the region are localized. In addition, the city has good logistics, a significant number of different profiles educational institutions, developed service, utility 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
In the first half of 2019, the total revenues to the budget of Vinnytsia amounted to UAH 2.4 billion (which corresponds to the indicator of the corresponding period of the previous year), and in their structure the share of own revenues increased significantly (to 64.1%). The share of tax revenues in the structure of the city budget was 85%; 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 the first half of 2019 amounted to UAH 4.3 thousand. The city budget is a donor budget, transferring funds annually to the state budget in the form of a reverse grant.
4. The sensitivity of the budget and the city economy to the impact of negative factors
Since the beginning of 2019 the consolidated debt of Vinnytsia City Council has decreased by 23%. This was due to the planned repayment of part of the loans raised by utility companies, the strengthening of the hryvnia exchange rate and the repayment of bank loans. Due to the signing of the loan agreement between the city and one of the state banks, the Agency forecasts an increase of the direct debt to acceptable values (taking into account borrowing conditions).
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
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 the first half of 2019, against the corresponding period of the previous year, there was a further growth in a number of indicators of socio-economic development: the industrial products sold grew by 17.1% to UAH 17.4 billion, the disbursed capital investment rose by 31.3% to UAH 2.3 billion; retail trade turnover - by 22.9% to UAH 4.7 billion, foreign trade turnover - by 7.7% to USD 718.8 million, the volume of construction work completed - almost in three times to UAH 3.4 billion. 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, the key state authorities of the region are localized. In addition, the city has good logistics, a significant number of different profiles educational institutions, developed service, utility 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
In the first half of 2019, the total revenues to the budget of Vinnytsia amounted to UAH 2.4 billion (which corresponds to the indicator of the corresponding period of the previous year), and in their structure the share of own revenues increased significantly (to 64.1%). The share of tax revenues in the structure of the city budget was 85%; 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 the first half of 2019 amounted to UAH 4.3 thousand. The city budget is a donor budget, transferring funds annually to the state budget in the form of a reverse grant.
4. The sensitivity of the budget and the city economy to the impact of negative factors
Since the beginning of 2019 the consolidated debt of Vinnytsia City Council has decreased by 23%. This was due to the planned repayment of part of the loans raised by utility companies, the strengthening of the hryvnia exchange rate and the repayment of bank loans. Due to the signing of the loan agreement between the city and one of the state banks, the Agency forecasts an increase of the direct debt to acceptable values (taking into account borrowing conditions).
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