What if hryvnia to collapse soon?

Author : Oleksiy Kushch

Source : 112 Ukraine

The Ukrainian government is unlikely to succeed in achieving macroeconomic stabilization and launching the work of enterprises in the real sector of the economy
14:09, 3 August 2021

Open source

The next round of devaluation will begin. Today, practically all assets in Ukraine are rapidly depreciating. For example, privatized objects are put up for sale at very cheap prices, but if I were investor, I would seriously think about buying them.

Such a colossus as First Kyiv Machine-Building Plant (former "Bolshevik"), set a starting price of only 1 billion 1,4 billion USD. Why? The privatization of the Kyiv plant Bolshevik "is a chance for a second life for this enterprise ... In previous years, production was destroyed, and now the main activity is leasing premises," Dmytro Sennichenko, chairman of the State Property Fund, admitted frankly.

But the Ukrainian government is unlikely to succeed in achieving macroeconomic stabilization and launching the work of enterprises in the real sector of the economy. This is evidenced by the bitter experience of the last 2 years. What can you do to correct this situation?

Of course, it is necessary to use all the levers, and there are two main ones - the structure of the state budget and the structure of taxes - in order to turn Ukraine on the path of economic development. But who will do it? Will Cabinet and the Verkhovna Rada have enough competencies?

After all, it is easiest to continue to increase tax pressure on individual entrepreneurs (by the way, in accordance with the budget declaration for 2022-2024, taxes will increase for them from next year), as well as to constantly raise energy prices and utility tariffs.

Well, we must admit that we will continue to be distinguished by expensive loans, high costs and low qualifications of top officials. Moreover, now there is speculative rather than investment demand on the Ukrainian market. Throwing aside political delights, many people's deputies and experts began to cut the bitter truth that the Cabinet and the NBU leadership cannot and does not know how to maintain confidence in the hryvnia and the banking system.

But, apparently, the authorities sneeze at the fact that the current financial and economic policy in our country is like a horse, who is given the command "Forward to Europe!", And the horse's legs are tied. Legs are tied, because the Cabinet of Ministers still does not have one single thing - a strategy to achieve this goal.

And without this, all actions turn into ordinary dreams. The European Union, of course, understands this, therefore, almost out of hand, they force Ukraine to adopt a number of laws. And most importantly, we need a strategy to save the country's economy! The Europeans will not write it for us. Moreover, they will not be engaged in its implementation.

There is only one way out - to prepare a long-term strategy of financial and economic development ourselves. Otherwise, we will have to tighten our belts again, realizing that we have already lived our best years.

In addition, leading analysts view the temporary strengthening of the hryvnia as a correction to its new period of weakening. Experts say this: the hryvnia is very overbought, and the dollar is oversold.

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