#Commentary of Marina Zheynova on Ukraine’s attempts to misrepresent catastrophic economic situation as success and development
Ukraine continues to pursue destructive economic policies, which it tries to represent as stabilization and even economic growth in media. For instance, the Kiev government has increased minimum wage and social benefits. But what does this mean for the economy at all and Ukrainian citizens in particular?
The National Bank of Ukraine has already acknowledged formally that the inflation rate previously projected for 2017 is much lower than the actual level. According to the World Bank’s new economic survey, inflation was expected to be 10% at the end of 2017, but this was not yet the limit. According to the State Statistics Service’s data, consumer inflation was 16.4% in September. A different indicator, only 8.1%, was applied to the Ukrainian budget.
It should also be reminded that Ukraine’s total public and guaranteed debt was 76.56 billion dollars as of August (about 80% of the GDP for 2016). And in 2018-2022, the country has to pay 28.71 billion dollars on foreign liabilities.
The government is canceling the regulation of prices for socially significant goods and, at the same time, some of the working capital of the economic entities will be stored in special accounts, and another round of devaluation of hryvnia is expected in the fall and, consequently, higher prices for the whole group of food products, basic necessities, petrol, oil and lubricants. The actual chain reaction, which can no longer be stopped and which one can justify any price increases, is triggered.
There is hope that tariffs for housing and communal services will not be increased, but not because of the economic dimension. Just artificial tariff escalation defies any logic.
To sum it up, Ukraine, by launching a printing press, resorts to populist measures, but it is one step away from returning to the hyperinflation of the 1990s. As a result, hryvnia can share the same fate as coupons-karbovanets with a bunch of zeros. The inhabitants of Ukraine are reassured by the increase in wages and allowances, but the increase in the prices of goods, including those that are socially significant, will quickly destroy the effects of these allowances.
The Ukrainian government is best at giving promises of another ‘improvement’. But promises do not fill the belly. But, such unsubstantiated promises may well result in an economic catastrophe.
Marina Zheynova, the DPR People’s Council deputy