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IBI-Rating has determined the credit rating and the rating of investment attractiveness of Khmelnytskyi city
17.04.2020
National rating agency ІВІ-Rating informs on determining of a credit rating of Khmelnytskyi city at uaА grade the outlook is «evolving», and the rating of investment attractiveness at invA+ grade.
Such rating grades represents high ability of the city to pay off its financial liabilities and high investment attractiveness.
The «evolving» outlook, with the highest probability, implies of rating changes throughout 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.
Were taken into account:
1. The structure of the economic complex of the city and the dynamics of key indicators
Khmelnytskyi has a powerful diversified economy, the basis of which is trade and processing industry. In a city with a population of 273.7 thousand people, more than 22 thousand entrepreneurs are registered, as well as almost 8.6 thousand enterprises and institutions. About 200 industrial enterprises carry out production activities. During the analyzed period, a plenty of indicators of the socio-economic development of the city showed positive dynamics. So, in 2019, the average monthly salary increased by 15.9% (up to UAH 9.4 thousand), retail turnover - by 5% (up to UAH 7.1 billion), and the commissioning of housing per 1 resident exceeded the average in Ukraine by 2.1 times. At the same time, some indicators are lower than the average for Ukraine per inhabitant, for example: foreign trade turnover, investment in fixed assets and foreign direct investment.
2. The level of budgetary capacity of the city and the debt burden
The budget of Khmelnytskyi has a moderate dependence on input transfers and a good diversification of its own revenues by sources of payment and payers. During the analyzed period, the dynamics of own budget revenues was positive, and their volume made it possible to finance current expenses and development expenses. In addition, funds from international organizations are raised to upgrade the city’s infrastructure.Serving of financial commitments is carried out in time. According to the results of 2019, the current balance of the local budget amounted to UAH 334.08 million. A sufficient level of liquidity and low consolidated debt burden on the budget revenues (1.6%) remain. At the same time, the need of upgrading in the capital base remains significant, and the probable reduction of the revenue for some budget items in 2020 could have adversely affected on the financial capabilities of the city in the corresponding period. The policy that is implemented in the economic and social sphere at the national level will have a significant influence on the financial capacity of the city.
3. Natural-geographical potential and the availability of material base for business development
The competitive advantage for business development in Khmelnytskyi is its territorial proximity to promising foreign markets and good transport connections (the city is located at the intersection of two European highways and a route of general state importance, has a developed rail transport system). The city has a well-developed business infrastructure: there are available industrial, commercial, office premises and land that can be used for business development; work is underway to create an industrial park; energy efficiency programs are being implemented.
4. Quality of urban industrial and investment policy
The city is characterized by the transparency of city government activity and qualitative communication with potential investors. An effective industrial and investment policy is being pursued aimed at developing small businesses, supporting local producers and expanding international cooperation. There is an experience in the successful implementation of investment projects, including the involvement of foreign resources.
In order to conduct the analytical research, the materials obtained from Khmelnytskyi 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 represents high ability of the city to pay off its financial liabilities and high investment attractiveness.
The «evolving» outlook, with the highest probability, implies of rating changes throughout 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.
Were taken into account:
1. The structure of the economic complex of the city and the dynamics of key indicators
Khmelnytskyi has a powerful diversified economy, the basis of which is trade and processing industry. In a city with a population of 273.7 thousand people, more than 22 thousand entrepreneurs are registered, as well as almost 8.6 thousand enterprises and institutions. About 200 industrial enterprises carry out production activities. During the analyzed period, a plenty of indicators of the socio-economic development of the city showed positive dynamics. So, in 2019, the average monthly salary increased by 15.9% (up to UAH 9.4 thousand), retail turnover - by 5% (up to UAH 7.1 billion), and the commissioning of housing per 1 resident exceeded the average in Ukraine by 2.1 times. At the same time, some indicators are lower than the average for Ukraine per inhabitant, for example: foreign trade turnover, investment in fixed assets and foreign direct investment.
2. The level of budgetary capacity of the city and the debt burden
The budget of Khmelnytskyi has a moderate dependence on input transfers and a good diversification of its own revenues by sources of payment and payers. During the analyzed period, the dynamics of own budget revenues was positive, and their volume made it possible to finance current expenses and development expenses. In addition, funds from international organizations are raised to upgrade the city’s infrastructure.Serving of financial commitments is carried out in time. According to the results of 2019, the current balance of the local budget amounted to UAH 334.08 million. A sufficient level of liquidity and low consolidated debt burden on the budget revenues (1.6%) remain. At the same time, the need of upgrading in the capital base remains significant, and the probable reduction of the revenue for some budget items in 2020 could have adversely affected on the financial capabilities of the city in the corresponding period. The policy that is implemented in the economic and social sphere at the national level will have a significant influence on the financial capacity of the city.
3. Natural-geographical potential and the availability of material base for business development
The competitive advantage for business development in Khmelnytskyi is its territorial proximity to promising foreign markets and good transport connections (the city is located at the intersection of two European highways and a route of general state importance, has a developed rail transport system). The city has a well-developed business infrastructure: there are available industrial, commercial, office premises and land that can be used for business development; work is underway to create an industrial park; energy efficiency programs are being implemented.
4. Quality of urban industrial and investment policy
The city is characterized by the transparency of city government activity and qualitative communication with potential investors. An effective industrial and investment policy is being pursued aimed at developing small businesses, supporting local producers and expanding international cooperation. There is an experience in the successful implementation of investment projects, including the involvement of foreign resources.
In order to conduct the analytical research, the materials obtained from Khmelnytskyi 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