IBI-Rating has determined the credit rating and an investment attractiveness rating of Kramatorsk city

National rating agency IBI-Rating informs on determining of the credit rating of Kramatorsk city at uaВВВ+ grade, with a «stable» outlook and the rating of investment attractiveness at invВВВ grade.

Such ratings grades represent the city’s sufficient ability to pay off its financial commitments and sufficient investment attractiveness. 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

The Kramatorsk city has a powerful industrial complex and a moderately diversified economy. The basis of the industry is formed by the enterprises of mechanical engineering (40%) and the production of metal constructions (10%); trade and services are also actively developing.

On the territory of Kramatorsk City Council, which unites 14 settlements, 186.8 thousand inhabitants lives and more than 10 thousand entities operates. During 2016-2018 the indicator of industrial products sold increased by one third to UAH 26.3 billion, which in 2.4 times higher than the national average per resident. Indicators of the city's economy are higher compared with the average data for Ukraine. Kramatorsk is characterized by low unemployment, high wages and no arrears in its payment.

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

In Kramatorsk city are localized the key organs of government of the region. In addition, in the city are a significant number of educational institutions (according to different profiles) and a developed service, communal and social infrastructure. At the same time, the impact on the development of business activity has proximity to the zone of Joint Forces Operation and a special regulatory regime in the region. The influence of the good location of the city in relation to international transport corridors is limited to the conduct of hostilities in the region and trade restrictions. There is competition for labor resources from nearby cities (industrial centers).

3. Financial policy efficiency and the budget indicators

In 2016-2018 there was an increase in revenues to the budget of the Kramatorsk City Council, which occurred at the expense of its own sources and official transfers from the budgets of higher levelsRevenues increased by 1.5 times to UAH 2.4 billion. Own revenues increased by 1.6 times to UAH 1.1 billion. Their basis is tax revenues, 1/5 of which forms by PrJSC «Novokramatorsk machine-building plant», which makes budget filling sensitive to the results of the company’s activities. The expenses of the city are mainly directed to the financing of protected items. The allocations for infrastructure development are increasing, including in conjunction with international financial and humanitarian organizations. At the same time, low debt burden on the budget revenue (about 2%) allows the city authorities to participate in infrastructure projects and attract additional funding. In terms of budgetary provision level (UAH 5.8 thousand), the city is inferior to the national average, but the difference between them is decreasing.

Mr. Dmytro Zadesenets, Director of the municipal department of the IBI-Rating agency, has announced: «Against the background of the political uncertainty in Ukraine, as well as taking into account the proximity of the Kramatorsk city to the zone of Joint Forces Operation, remain risks that the socio-political situation in the city and region may be shaken. A further escalation of the conflict will have a direct negative impact on the state of the socio-economic complex of the city. At the same time, in recent years, there has been a decrease in tension and an increase in financing for the development of the city, which was accompanied by an improvement in budget indicators».

Mr. Andriy Pankov, Kramatorsk Mayor noted: «Today, Kramatorsk is experiencing difficult times. In previous years, the city and regional authorities managed to stabilize the socio-economic situation in the city and restore the infrastructure. Now we have moved to active actions to improve the operating environment in the city and attract investors, ensure the transparency of the city authorities and public decision-making. Despite the state of affairs in the region, Kramatorsk continues to evolve and always acts as a reliable partner for business».

In order to conduct the analytical research the materials obtained from Kramatorsk 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