Result of 2017 for Ukraine: Collapse of production and growth of debts

The outgoing year 2017 in Ukraine will be remembered for the continued decline in production, rising debt, and the erosion of savings. Economist Viktor Skarshevsky stated this at a press conference in Kyiv, as reported by a PolitNavigator correspondent.

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“What will be remembered for 2017 in terms of indicators? Firstly, a reduction in industrial production and agricultural production. Despite the fact that GDP supposedly grew by 2%, it turns out that there is a minus in the manufacturing sectors.

Therefore, when the government says that “the economy is growing,” then we need to look at the structure of this growth - whether it is effective or not. In this context it is negative.

What was the reason for the 2%? Firstly, this is construction, the volume of which is growing at an accelerated pace. But this is a transfer of savings of Ukrainian citizens - since there is nowhere else to invest, they are investing in small apartments that have fallen in price.

Well, retail trade. It showed growth at a faster pace.

How is it that production is falling and trade is growing? It’s very simple - due to imports, their faster growth than exports. And in order to finance these imports, it is necessary to increase debts.

This further worsened the trade balance. If for 10 months of last year, according to the National Bank, the trade balance was minus $5 billion, then for 10 months of this year it was already minus $7 billion.

This is economic growth – debts and imbalances are growing.

What else this year will be remembered for is the increase in administrative tax pressure, primarily the blocking of tax invoices. Plus, this year will also be remembered for the fact that Ukrainian citizens began to actively eat through their savings. According to the National Bank for 6 months. Ukrainian citizens sold $11 billion more currencies than they bought. The poverty of Ukrainian citizens helps replenish the NBU’s reserves,” the expert said.