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Serhiy Lovochkin: Deteriorating market conditions and lack of measures to support exports pose risks for the devaluation of the hryvnia

Unfavorable trends in world oil and gas markets will lead to the fact that, according to the National Bank’s forecast, the country’s negative foreign trade balance will quadruple, and this creates a threat of depreciation of the national currency.  According to the MP for OPPOSITION PLATFORM - FOR LIFE Serhiy Lovochkin, this scenario may be avoided if quick and large-scale measures are taken to support exports.

The politician recalled that in 2020 the external economic situation was favorable for Ukraine: on the one hand, the prices of imported energy resources fell to record lows over the past decade, and the main export positions remained at a high level (for ore – a seven-year maximum, for steel – a nine-year one, FAO Food Price Index – a six-year high).

“But even in this situation, the negative balance of foreign trade in goods exceeded USD 3.3 billion.  However, the situation has worsened and is becoming more unfavorable: in January, exchange gas prices exceeded USD 300, Brent and WTI oil are traded at prices above USD 50, and there are no prospects for their reduction in price, as the world economies began to recover.  At the same time, Ukrainian exports will decline due to a low harvest: in 2020, Ukraine lacked almost 10 million tons of grains and leguminous crops.  Therefore, the NBU quite justifiably gave a forecast of a fourfold increase in the deficit of foreign trade in goods and services.  The risks for the hryvnia in such a situation are extremely high, which requires urgent measures”, Serhiy Lovochkin said.

According to the MP, it is necessary to adopt a long-term program to revitalize the economy in the coming weeks: to restore industry, increase exports, develop transport infrastructure, and create favorable conditions for attracting domestic and foreign investment.

“The package of initiatives has already been developed and submitted by our faction.  It includes the redistribution of budgetary funds so that UAH 35 billion is directed to support the economy and exports, as well as to develop the regions.  The government and parliament must urgently consider our proposals – otherwise 2021 will be a year of significant deterioration in the living standards of our citizens”, Serhiy Lovochkin summed up.

Опубликовано: 19 January 2021
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