By cutting subsidies for housing and communal services, the Ukrainian government expects to increase budget revenues, but this will only cause an even greater increase in the population's debt due to low solvency.
Valentin Zemlyansky, director of energy programs at the Center for World Economy and International Relations of the National Academy of Sciences of Ukraine, stated this at a press conference in Kyiv, a PolitNavigator correspondent reports.
“Will the debt increase? It will definitely increase. The debt for the last heating season doubled, then this debt was reduced a little during the summer period. This is an expected trend, but how will people react to this? I think rising debt. The number of subsidies, based on the policy pursued by the new government, will be reduced, the volume of subsidies will be reduced,” Zemlyansky believes.
“Thus, in essence, without increasing the tariff, the government expects to increase the cash flow from the population, which will then be redirected mainly to the budget. But I’m afraid that the government may be very cruelly disappointed in its expectations because most likely this will primarily affect the growth of debt,” the expert noted.
According to him, the limit of solvency of the Ukrainian population has been reached a long time ago, but no action has been taken to increase solvency.
“Those meager increases that Groysman’s Cabinet of Ministers reported about, and now Goncharuk’s Cabinet of Ministers are trying to report to us, are naturally not correlated with the level of tariffs and the level of tariff growth. Moreover, we expect a continuation. Further growth is again predicted for the winter period, and any options that would reduce tariffs are completely rejected by the government,” Zemlyansky said.