«IBI-Rating» affirmes the credit rating of Vinnytsia city at uaА- grade

Rating agency «IBI-Rating» informs on affirming of the credit rating of Vinnytsia city at uaА- grade with the «stable» outlook.

The affirmed grade of the credit rating of Vinnytsia city is due to significance of the city as a regional centre of Ukraine, its highly diversified economic complex contributing to the rapid recovery of sources of filling of the city budget revenues, as well as a moderate level of the consolidated debt burden on the city budget given a regular schedule of servicing and repayment of the debt.

The development of Vinnytsia city in 2016 continued being under pressure of the political instability in Ukraine. Given this process, against the background of growing average monthly wages and reducing arrears on payments thereof, a decrease in the number of available population was observed in the city. In the above conditions, the city’s economic complex continues demonstrating gradual recovery: the pace of growing industrial output sold, foreign investments made, housing commissioned, retail and foreign trade turnover exceeded the country’s average values.

The mentioned trend, actions on decentralization, as well as a widened circle of payers of taxes and fees to the local budget due to the territories joined to the city in 2015, enabled Vinnytsia city to continue to increase the budget revenues, to improve the budget revenue diversification, as well as to keep the indicator of the budget provision at a higher level than the average level in Ukraine.

By the results of 2016, the amount of the budget revenues of Vinnytsia city grew by 33.1% as compared to 2015, amounting to UAH 2 993.4m, of them the budget own revenues increased by 1.6 times amounting to UAH 1 599.5m; official transfers from higher level budgets increased by 13.2% amounting to UAH1 393.8m.

Generated budget revenues allowed to finance current expenditures, as well as to increase allocations for capital expenditures by 1.8 times to the amount of UAH 598.6m.

The city budget was consolidated with a surplus in the amount of UAH 154.3m versus the amount of UAH 92.9m of the previous year. The indicator of the overall budget liquidity grew by 5.8 p.p. As at 01.01.2017, it was 13.9%, and continues being at a high level.

The city continues cooperating with financial institutions, including international financial institutions, and repaying the loans channelled at developing the city infrastructure. During 2016, the consolidated debt of the city decreased by 1.2%, amounting to UAH 119.4m, as at 01.01.2017. The ratio of the city’s consolidated debt to the city budget revenues for 2016 (net of transfers) decreased by 4.4 p.p., accounting for 7.4% as at 01.01.2017, being an acceptable value.

A positive impact on the credit rating may have, as follows: a further increase in the budget revenues of Vinnytsia city and improvement of most indicators of the social and economic development of the city per capita. A negative impact on the credit rating may have, as follows: decreased indicators of the budget revenues, reduced liquidity, increased debt liabilities.

In order to perform the analytical research the materials obtained from Vinnytsia city have been used, including: treasury reporting, target indicators of the city social and economic development and the city budget for 2016, statistics data, other necessary internal information, as well as the information from the public sources, which the Rating agency considers credible.

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