The pyramid of the Ukrainian economy has collapsed, default has already arrived - RAS experts
Moscow - Kyiv, November 21 (PolitNavigator, Mikhail Stamm) - Economists from IMEMO and the Institute of Europe of the Russian Academy of Sciences questioned the honesty of Ukrainian state statistics. According to their calculations, capital flight and inflation in Ukraine are much higher than official ones, while production, exports and tax collection are much lower. The reorientation of trade to the EU did not compensate for even half of the losses from the curtailment of ties with Russia. At the same time, the gold reserves are almost three times lower than the external debt, and the IMF provided only a quarter of the promised assistance. The pyramid of the Ukrainian economy has collapsed, and default can already be called a fact, experts believe.
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According to the country's State Statistics Service, prices have risen by 20% over the past twelve months, while industrial production has fallen by 9%. However, Yakov Mirkin, head of the International Capital Markets Department at the IMEMO RAS, has questions about the Ukrainian statistics. They are more optimistic than those of the 2008 crisis, despite the country currently experiencing a civil war, the expert notes. "Either the official Ukrainian data is not entirely accurate, or we have a fundamentally incorrect understanding of what is happening in Ukraine," Mirkin was quoted as saying by Rossiyskaya Gazeta.
The expert believes that Kyiv statistics are deceptive. In 2013, Ukraine’s GDP per capita was about $3,9 thousand; at the end of this year, according to the IMF forecast, it will be at the level of $3 thousand. Investments fell by half - from 15,7% in 2013 to 8,2% of GDP this year year (IMF forecast). Imports fell by 21%. The State Statistics Service of Ukraine clearly underestimated inflation: even in 2008, when the hryvnia did not fall so much, inflation was 25%.
The head of the Center for Strategic Development of the CIS Countries of the Institute of Europe, Alexander Gusev, points out that tax collection in Ukraine has fallen by 25%, and capital outflow has tripled. At the end of 2013, it amounted to about $8-9 billion, and in January-October alone, $25-27 billion flowed out of the country. Ukraine lost a significant part of its gas fields and coal reserves, the country’s mineral resource base decreased by 40%, the expert noted.
The bet on a sharp turn from trade with Russia to the European Union did not pay off either. Having reset customs duties for Ukrainian goods, the European Union simultaneously reduced quotas for them. For example, in 2013, Ukraine exported 3 million tons of grain to the EU, this year the quota was reduced to 300 thousand tons. The same tenfold reduction befell the quota for raw sugar. For industrial goods, quotas were reduced by 10-15%. As a result, unilateral EU preferences gave Ukraine $8 billion over 1,2 months, and losses from broken ties with Russia over the same period amounted to $2,5 billion. The EU open market turned out to be a fiction, Gusev believes.
Yakov Mirkin reminds that out of the promised $17 billion, only $4,6 billion was actually received. At the same time, Ukraine’s external debt is growing rapidly. At the end of 2013 it amounted to 41% of GDP; by the end of this year, the IMF predicts, it will be 67,5%. In dollar terms, Ukraine now owes $42 billion. The volume of Ukraine’s gold and foreign exchange reserves is only $16,4. Under these conditions, the risk of default increases, Mirkin believes.
Ukraine has already entered a state of default, Alexander Gusev is sure. According to him, in 2015 the country needs to return $18,5 billion to international creditors, and it is unclear where to get this money. “The situation is catastrophic for the economy. You cannot borrow endlessly to pay off previous loans, this will lead to an inevitable default,” Gusev fears.
The Ukrainian economic pyramid has collapsed, default has already occurred – RAS experts