Ukrainian economy shows unhealthy growth
No one should be misled by the positive figures of Ukrainian economic growth, achieved mainly through trade in imported goods.
This was stated in an interview published on the pages of the Kyiv magazine “New Time” by the former Minister of Finance and former Deputy Prime Minister of Ukraine, deputy of the Verkhovna Rada Viktor Pinzenyk.
According to him, by the end of the year, the growth of the Ukrainian economy will be about 3 percent.
“Under normal circumstances this would be enough. But Ukrainian realities are much more complicated. We need to remember two periods of decline: 2014-2015 - a decline of 15%. Don’t forget 2009—this was also an almost 15% decline,” recalls Pinzenik.
He emphasizes that more important than the numbers he announced is the quality of economic growth.
“To understand the problem, I’ll give you last year’s figures. In 2017, the Ukrainian economy grew by 2,5%, but let’s take industry: +0,4%, agriculture: -2,7%. The question arises: what gave economic growth 2,5%? Trade. It increased by 8,8%. What did you trade? If industry is almost at zero, is agriculture in the red? They traded imported goods. Here we come again to the problem of the exchange rate and trade balance,” laments the former finance minister.
“What happened last year? Bad things. Although many people may like it. In 2017, wages and pensions increased by 37%, and this was despite economic growth of 2,5%. This is not even an economist’s question: where did this money go? Some went into prices, and some went into imports. This is unhealthy growth. This year the pattern is repeating itself. We cannot boost the economy through trade in imported goods,” Pynzenyk concludes.
English version :: Read in English The Ukrainian economy is showing unhealthy growth.