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IBI-Rating has affirmed the credit rating and the rating of investment attractiveness of Odesa city
17.07.2020National rating agency ІВІ-Rating informs on affirming of the credit rating of Odesa at uaА grade with an «evolving» outlook, and the rating of investment attractiveness at invAA- grade.
Such rating grades represent the excellent investment attractiveness and strong ability of the city to pay off its financial commitments. The «evolving» outlook, with the highest probability, implies of rating changes during the year. Currently, such rating outlook is applied to all clients of the Agency. It is due to increased uncertainty regarding the actions of authorities and business entities in case of aggravation of the epidemiological situation in Ukraine and the world. The notation «-» indicates an intermediate rating category relative to the main category.
Were taken into account:
1. The dynamics of key indicators
In 2019, there was a further increase of the main indicators of socio-economic development. In 2019 against 2018, there was an increase in such indicators of socio-economic development of the city as: the volume of sold industrial products by 17% - up to UAH 33 billion, the volume of housing commissioning 1.7 times - up to 500.8 thousand m2, retail turnover by 14, 9% - up to UAH 42.1 billion, foreign trade turnover by 9.8% - up to more than USD 2.2 billion. Most indicators per capita are comparable/higher than the national average.
2. Competitive advantages/disadvantages in comparison with other cities of the country
Odesa is one of the largest logistics hubs in Ukraine. The city has a large number of educational institutions in different profiles and developed service, communal and social infrastructure. A significant number of operating enterprises, the status of one of the largest tourist centres in the country and more than 1 million people of the population provides high domestic demand for goods and services and creates a suitable basis for the further development of the manufacturing sector and the transport industry. At the same time, the cost of labour resources is lower compared to the capital. Effective actions aimed to attract local and foreign investments, as well as a 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, human and social potential of the city.
3. Efficiency of financial policy and budget indicators
In 2019, total revenues to the budget of Odesa city amounted to almost UAH 11.3 billion and exceeded the indicator for 2018 by 5%, while the amount of own revenues increased by 10.7%. The budget of Odesa is characterized by a sufficient level of liquidity. Odesa City Council and utilities are raising funds from domestic banks and international institutions, including for the modernization of infrastructure. The direct and consolidated debt burden of the Odessa City Council is moderate (as of January 1, 2020 - 24% and 34.5% of own budget revenues, respectively). At the same time, maturities are diversified in time, which avoids peak loads.
4. The sensitivity of the budget and the city economy to the impact of negative factors
The city has a diversified economy and a moderate sensitivity of the budget to the activities of individual enterprises and industries. At the same time, the implementation of quarantine restrictions at the end of the Q1 by 2020, as well as changes in legislation (exemption of enterprises from paying certain taxes during the quarantine period) led to a reduction in tax revenues and increased risks to the budget. In order to conduct the analytical research the materials obtained from Odesa 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 excellent investment attractiveness and strong ability of the city to pay off its financial commitments. The «evolving» outlook, with the highest probability, implies of rating changes during the year. Currently, such rating outlook is applied to all clients of the Agency. It is due to increased uncertainty regarding the actions of authorities and business entities in case of aggravation of the epidemiological situation in Ukraine and the world. The notation «-» indicates an intermediate rating category relative to the main category.
Were taken into account:
1. The dynamics of key indicators
In 2019, there was a further increase of the main indicators of socio-economic development. In 2019 against 2018, there was an increase in such indicators of socio-economic development of the city as: the volume of sold industrial products by 17% - up to UAH 33 billion, the volume of housing commissioning 1.7 times - up to 500.8 thousand m2, retail turnover by 14, 9% - up to UAH 42.1 billion, foreign trade turnover by 9.8% - up to more than USD 2.2 billion. Most indicators per capita are comparable/higher than the national average.
2. Competitive advantages/disadvantages in comparison with other cities of the country
Odesa is one of the largest logistics hubs in Ukraine. The city has a large number of educational institutions in different profiles and developed service, communal and social infrastructure. A significant number of operating enterprises, the status of one of the largest tourist centres in the country and more than 1 million people of the population provides high domestic demand for goods and services and creates a suitable basis for the further development of the manufacturing sector and the transport industry. At the same time, the cost of labour resources is lower compared to the capital. Effective actions aimed to attract local and foreign investments, as well as a 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, human and social potential of the city.
3. Efficiency of financial policy and budget indicators
In 2019, total revenues to the budget of Odesa city amounted to almost UAH 11.3 billion and exceeded the indicator for 2018 by 5%, while the amount of own revenues increased by 10.7%. The budget of Odesa is characterized by a sufficient level of liquidity. Odesa City Council and utilities are raising funds from domestic banks and international institutions, including for the modernization of infrastructure. The direct and consolidated debt burden of the Odessa City Council is moderate (as of January 1, 2020 - 24% and 34.5% of own budget revenues, respectively). At the same time, maturities are diversified in time, which avoids peak loads.
4. The sensitivity of the budget and the city economy to the impact of negative factors
The city has a diversified economy and a moderate sensitivity of the budget to the activities of individual enterprises and industries. At the same time, the implementation of quarantine restrictions at the end of the Q1 by 2020, as well as changes in legislation (exemption of enterprises from paying certain taxes during the quarantine period) led to a reduction in tax revenues and increased risks to the budget. In order to conduct the analytical research the materials obtained from Odesa 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