Rating agency IBI-Rating informs on upgrading of the credit rating of Vinnytsia city from uaA- to uaA grade. The rating outlook has been changed from «positive» to «stable». The rating of investment attractiveness of the city has been affirmed at the invA+ grade.
According to the classification of the Agency, uaA grade is characterized by high creditworthiness and financial stability in comparison with other cities of Ukraine. The invA+ grade means high investment attractiveness. The «stable» outlook, with the highest probability, implies immutability of the rating on the horizon for 12 months.
The main factors which influenced on the rating upgrading are long-term positive dynamics of budget indicators and effective local debt management policy. Thus, the budget revenue of the Vinnytsia for 2017 amounted to UAH 4.34 billion, the share of own income accounted for 51.2%, and their volume for the last year increased by 38.8%. Analysts of the IBI-Rating agency also mark growth in 2017 against 2016:
– the volume of sales of industrial products by 34.4% – up to UAH 26.98 billion;
– the volume of developed capital investments by 35.6% – up to UAH 3.91 billion;
– foreign trade and retail trade turnover by 29.4% – to USD 1.07 billion and 0.3% – up to USD 6.76 billion, respectively;
– the volume of direct foreign investments by 21.9% – to USD 115.90 million.
As a result of fulfilling its obligations, the volume of direct debts of Vinnytsia City Council decreased by 8.3% or UAH 7.7 million during 2017 and amounted to UAH 85.1 million as of 01.01.2018. At the beginning of 2018, the consolidated debt load on the revenue side of the budget was 4.8%, which is an acceptable value. T
he updating of the credit rating and rating of investment attractiveness grade of Vinnytsia city is also due to significance of the city as a regional center; the growth of most indicators of socio-economic development and the exceeding of some of them above the average in Ukraine; diversification of the city’s economic complex by types of economic activity; low concentration of budget revenues by major tax payers and payments.
At the same time, the city ratings grade is confined by the difficult economic situation in the country and the continuation of the military conflict in certain regions, which has a negatively effects on the growth potential and solvency of taxpayers and limits the growth of the revenue part of the city budget. The Agency also notes that the city has a significant need for attracting an additional funding, including for the restoration of city infrastructure, due to the high level of depreciation of fixed assets, including housing, engineering and transport infrastructure.
In order to conduct the analytical research, the materials obtained from Vinnytsia 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.
