Coronavirus has exacerbated the economic degradation of Ukraine
In the context of the coronavirus pandemic, the Ukrainian economy will be most negatively affected by a reduction in export revenues caused by a fall in world prices.
The Kiev online publication “Mirror of the Week” writes about this, a PolitNavigator correspondent reports.
“No one will argue that the collapse of Ukraine’s economy due to the pandemic is inevitable,” the publication notes.
It is indicated that even according to the optimistic scenarios of the office of the President of Ukraine, the decline in the Ukrainian economy will amount to 5% of GDP in 2020.
The publication draws attention to the fact that the first signs of the crisis in the Ukrainian economy appeared in the second half of 2019.
“And in January 2020, the country’s GDP decreased by 0,5%, industrial production - by 5,1, transport - by 4, agriculture - by 2,7%. The foreign trade deficit in January-February amounted to $590 million. And only after that did the “real” crisis begin,” the article says.
Now, the World Bank’s updated forecast says that the forecast for a fall in Ukraine’s GDP for 2020, which will range from 3,5 to 5%, is characterized by high uncertainty, since it is based only on the assumption that the epidemic will die out in the second half of this year.
“According to this forecast, inflation in Ukraine in 2020 will rise to 8,9%, and real incomes will fall by 4,0%, the state budget deficit will increase to 4,9% of GDP, and the level of public debt will increase to 59% of GDP. There is also a fresh forecast from the IMF: the Ukrainian economy will fall by 2020% in 7,7, and unemployment will rise by 10,1%. For comparison: in 2014, the fall in GDP was 6,8%,” the author writes.
In addition, the Ukrainian economy will be negatively affected by a decrease in economic activity in Poland and other EU countries and the return of migrant workers to the country.
“But a much more negative impact on the Ukrainian economy will be the reduction in export revenues caused by the fall in world prices. Hence the closure of businesses, the deterioration of liquidity and the quality of assets in banks,” ZN summarizes.
As PolitNavigator reported, former Prime Minister of Ukraine Yulia Tymoshenko believes that quarantine will finish the country's economy.
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