Peculiarities of the Development of Ukraine's Financial Potential in the Period of Military Conflict

Andriy Polchanov ()
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Andriy Polchanov: Zhytomyr State Technological University, Zhytomyr, Ukraine

Oblik i finansi, 2018, issue 2, 96-101

Abstract: Evaluation of the impact of military conflict on the financial potential of the state allows to substantiate the ways of the most effective economic recovery and the necessary infrastructure for this. The purpose of the article is to determine the specifics of the development of Ukraine's financial potential in the period of the military conflict on the basis of the integrated assessment of financial potential changes during the 2014-2016. Based on the analysis of publications, the main channels of influence of the military conflict on the financial potential of the state were identified. The peculiarities of the development of the Ukraine's financial potential in the period of military conflict were revealed. In particular, the sharp and significant increase in military spending has caused the redirection of the movement of financial resources from various sectors of the economy to national security and defense needs. As a result of the actual destruction and loss of control over assets in the conflict zone, as well as the weakening of positions in traditional markets for domestic products and capital outflows, Ukraine's GDP fell against the background of the global trend towards its growth. The growth of macroeconomic instability in the country under the influence of military and political factors led to a deterioration in the authority of the state as a borrower in the international financial market. In addition, there was an increase in the cost of bank loans for enterprises in Ukraine during the active phases of military operations. According to the author's opinion, the beginning of the deterioration of the macroeconomic and military-political situation in Ukraine could be observed even before the military conflict in the east, which, in turn, further deepened the existing imbalances in the economy and society. It was proved that the military conflicts have a negative impact on the indicators of the financial system, and so the success of economic reforms is inextricably linked with the effectiveness of measures to establish peace.

Keywords: military conflict; financial potential of the state; national economy; GDP; credit rating (search for similar items in EconPapers)
JEL-codes: E50 E60 (search for similar items in EconPapers)
Date: 2018
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