Paradoxes of Ukrainian economy's growth

Author : Viktor Pynzenyk

Source :

We are worried not only about such rates of economic growth, but also about its quality
21:03, 13 November 2017

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The National Bank of Ukraine made public an assessment of Ukraine's economic growth for the third quarter of this year at 2% (GDP in the first quarter increased by 2.5%, in the second quarter it grew by 2.3%).

It is worth understanding the components of this growth.

The obvious is the first paradox. Industrial production for the nine months decreased by 0.3%, the agricultural sector also declined (-0.7%). Construction has increased substantially (by almost 24%), but its small share has insignificant influence on the dynamics, as well as transport (due to the same circumstance), which also demonstrates growth.

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And what does growth mean? Good dynamics is demonstrated by trade. At the end of nine months, it increased its turnover by 8.8%. And this is the second largest sector of the Ukrainian economy (after the industry). It is estimated that it has provided about 1.4% of GDP growth since the beginning of the year, that is, its main part.

But here we see the second obvious paradox. And what does our trade sell, what has increased sales, when the industry is declined, and agriculture too? Such dynamics of this sector was ensured not by the national economy, but by imports. For 8 months of this year, its scale has grown by 27.4%.

It is difficult to be calm not only about such rates of economic growth, but also about its quality. Because the locomotive of our current economic growth is trade, which in turn is provided by a significant increase in the scale of imports.

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