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Expert Volodymyr Vlasyuk: Real welfare growth will not take place
The Budget 2018. Who will have increased salaries? How will reforms and key industries be funded? Will the government manage, without raising taxes, to form a budget for growth and keep inflation at a low level throughout the year? Volodymyr Vlasyuk, Director of the State Enterprise "Ukrpromovzovnishexpertiza", analyzed the country's budget--2018 in the program "Today. Morning" on the Ukrainian radio.
"An interesting structural approach to the budget analysis, for example, is the budget deficit at 2.4%, which means that budget expenditures will be higher than budget revenues. We will need to borrow money again to cover this budget deficit.
The trend of excess of expenditure over income leads to external borrowing, which means that we have accumulated public debt. In Ukraine, the level of public debt has already reached 84.6% of the gross domestic product. This is a lot for Ukraine. Debt should be returned to creditors. Since there are no structural changes in industry, the economy remains relatively low in competitiveness, therefore, the increase of structural debt in relation to GDP is an alarming indicator for the Ukrainian economy.
It is not necessary to count on privatization as a source of income. This is a mistake made in the 90's. From the privatization we should have got an effective owner. It will be much more effective than just getting money for an enterprise.
We will have a devaluation of the hryvnia. The process is objective, since the course of the national currency reflects the power of the economy.
The nominal part of the Ukrainian budget is likely to be fulfilled. But the question arises about the real purchasing power of money paid out to people. And the money "are eaten" by inflation, so the real increase in the welfare and purchasing power of the household will not happen.
You can increase welfare, only when wages increase with labor productivity, with the volume of the economy. "