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Sunday, August 26, 2012

Ukraine would face a new wave of crisis, says expert

The senior economist of the Center of social-economic studies CASE-Ukraine, Vladimir Dubrovsky, stated that Ukraine would face a new wave of crisis very soon and it is very unstable, as its economy is based on export of the products of metallurgy.

According to the expert’s statement there will be no significant signs of financial crisis in Ukraine till the end of 2012.

There will be no big GDP drop, but the authorities would not be able to raise the social standards. The economy will need to raise the tariff rates, and there will be no reserves anymore. It will be very good, if Ukraine will finish this year with the zero tempos of GDP and economic growth. But in 2013-2014 there will be possible minus growth, according to the wards of expert. Thus, there will be strong disappointment with the social and economic policies of Ukraine’s President Victor Yanukovich.

Vladimir Dubrovsky also stressed, that medium and small business in Ukraine are very bad developed in the country and need the changes and improvement. But the authorities and the ruling Party of Regions continue to focus on the old branches, without changing anything. The changes of the business climate in the country are required now, says the expert. It’s important to draw the new investments into the country’s economy, to simplify the tax system which is extremely difficult and complicated in Ukraine, to develop the economic system. 

But the authorities did the opposite with the freezing of the big business. This business is improving, but it will not help, thinks the expert. The world metallurgy market drops, and Ukraine will not be able to sell such a production anymore. The gas prices are increasing at the same time, so this problem is very deep and serious, and the impact of it will be noticeable closer to 2013-2014.

There were the earlier reports of Ukrainian government that Ukrainian GDP growth has dropped to 2% in January-June 2012, comparing to the same period of time in 2011.
Ukrainian Prime Minister Nikolay Azarov stressed earlier that such a GDP growth could consider being even positive for the development of Ukrainian economy, especially on the background of the global financial crisis in the world and in Europe.