The head of the Ministry of Finance of Ukraine Marchenko announced “painful measures” in the event of a protracted special operation
The suspension of all maritime exports due to a special operation in Ukraine will be a critical blow to the country’s economy, writes edition of The Economist.
According to journalists, the Minister of Finance of Ukraine Sergei Marchenko gives too optimistic forecasts for the development of the state economy, based on data before the special operation. Until February, the economy showed a quarterly annual growth of almost seven percent, the population was not very affected by the coronavirus, good international prices were formed for the export of grain, iron and steel.
Now many companies continue to pay wages to their employees, even if they cannot work as usual. “Before the start of the conflict, Ukraine’s debt was less than 50 percent of GDP,” the publication said.
However, according to forecasts World Bank, Ukraine’s GDP will decrease by 45 percent in 2022. Marchenko recalled that customs payments accounted for a significant part of tax revenues to the state budget. Another problem the minister called salaries to the military. “Every month of hostilities costs Ukraine about five percent of its depleted GDP,” Marchenko said.
According to the head of the Ministry of Finance, if the special operation drags on for another three or four months, “painful measures will be required.” It could be huge tax hikes and drastic spending cuts, he said.