IBI-Rating has affirmed the credit rating and the rating of investment attractiveness of Sumy City Territorial Community

National rating agency IBI-Rating informs on affirming of the credit rating of Sumy City Territorial Community at uaA– grade with «negative» outlook and CreditWatch listing, as well as the rating of investment attractiveness at invA- grade.

Such rating grades represent the high ability of the city to pay off its financial commitments and high investment attractiveness. The notation «–» indicates an intermediate rating category relative to the main category. The negative outlook indicates a high probability of credit rating downgrade during the year.
The negative outlook and Credit Watch listing are due to the deterioration of operating conditions and increased uncertainty about the prospects for economic development against the backdrop of prolonged hostilities on the territory of Ukraine caused by aggression from the russian federation. Currently, this outlook applicable by agency to all subjects of rating.

Were taken into account:

1. The structure of the economic complex and effectiveness of financial policy
Most indicators of the social and economic development of the community per 1 person exceed the level of such indicators in Ukraine as a whole (the volume of industrial production sales, the volume of retail turnover, foreign trade turnover of goods, the volume of housing commissioning). The budget revenues of Sumy city TC according to the results of 2021 amounted to UAH 3.28 billion (+27.10% compared to the previous year). According to the results of 2021, the budget's own revenues amounted to UAH 2.51 billion (+UAH 544.98 million compared to 2020). The budget revenue plan of Sumy city TC for 2021 is fulfilled to 102.7%, including the general fund - to 102.8%, and the special fund - to 102.1%.The plan for the receipt of own income is fulfilled to 103.9%.
Receipts to the community budget are moderately diversified by sources and payers. The share of taxes paid by the TOP-20 taxpayers for 2021 was 23.93% of the total amount of tax revenues received by the community budget. The volume of own revenues of community budget exceeds the average indicators of local budgets. The indicator of fiscal capacity of the Sumy city TC budget (personal income tax per 1 resident) is higher than the national average, which is why the budget remains a donor budget, transferring a reverse subsidy to the state budget. The ratio of consolidated debt to own budget revenues is low: to revenues for 2021 – 8.61%, to planned revenues for 2022 – 7.24%.

2. Investment potential

A developed transport service system operates in Sumy city. There is a large railway station on the territory of the city; 2 highways of national importance and 2 highways of regional importance pass through the city. A bus station operates from which international and intercity transportation is carried out. There is also a suburban bus station. Sumy Airport (owned by the Sumy Regional Council) is located in the heart of the city and operates as a private transportation system.
Sumy city territorial community is sufficiently provided with qualified personnel and has a powerful personnel potential: the main higher and secondary specialized educational institutions of the region are concentrated in the city. There is a developed trade, industrial and business infrastructure. Work is underway to create the Sumy Industrial Park. There is a target program for supporting small and medium-sized enterprises of Sumy city territorial community for 2020-2022. The majority of local tax rates are below the maximum level stipulated by the legislation, which creates conditions for the development of entrepreneurship. Since June 2019, Sumy Business Hub has been operating in Sumy city - an open space for cooperation, training and exchange of ideas of representatives of the business community of Sumy region, within the framework of which various activities for the development of small and medium-sized businesses are held. A coordinating council for the entrepreneurship development works at the Sumy city council.
Significant attention is paid to measures to increase the energy efficiency of the city economy. Sumy City Council has experience in successfully implementing investment projects with the participation of international financial and donor organizations. At the same time, a significant number of projects relate specifically to the direction of increasing energy efficiency.

In order to conduct the analytical research, the materials obtained from Sumy City Council 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