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Ukraine's economy: key problems and prospects

V. Heyets

Economy and Forecasting, 2016, issue 1, 7-22

Abstract: The article examines the key issues of the development of Ukraine's economy in the current year of 2016 including in terms of the impact of expected changes in the global economic environment. Together, they are those that lead to restrictions in external demand for Ukrainian exports. Under such conditions, it will be impossible to revive economic growth at the expense of the exogenous factors (without changes in the conditions of foreign trade and increase in the competitiveness of Ukrainian produce) as well as achieve the officially declared 2% GDP growth. This conclusion is based on the fact that with a harsh domestic policy of austerity and shrinking money supply (which is planned for 2016), the possibility of the rise in domestic demand is limited. In accordance with the above challenges that hinder the economic recovery in 2016, the article justifies the necessary changes in economic policy to overcome the dependence on external borrowing, to demonopolize the banking sector and expand the availability of credit, especially for small and medium businesses, to raise lending capacity for the implementation of infrastructural projects, and to support the development institutions. Outlined proposals for changes in Ukraine's export policy, especially concerning the need to expand quotas for trade with EU countries. The author defines conditions that can help succeed in the competition for the realization of "Marshall Plan" for Ukraine as a tool to modernize this country's economy. Attention is given to how the resources inherent in the socio-cultural components of the people's behavior can be used for economic modernization.

Date: 2016
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