Economist Savchenko: If Ukraine will completely stop importing goods from Russia, the Russians will lose 0.4% of GDP. This is quite a serious blow

Экономист Савченко: Если Украина полностью прекратит импортировать товары из РФ, россияне потеряют 0,4% ВВП. Это довольно серьезный удар

If Ukraine stopped importing Russian goods, Russia would have lost about 0.4% of GDP. On this edition of “GORDON” said the former Deputy head of the NBU Board, financier, economist Alexander Savchenko, commenting on the decision of the Cabinet of Ministers to expand the list of goods from Russia, which Ukraine introduced embargo.

“Last year, we have a negative balance with Russia – about $3 billion That Ukraine is Russia sells less goods than it buys. This means that we do support the Russian economy. With a balance of zero economic growth in Ukraine would not be 3.3% and of 5.3%. It is the result of wrong foreign policy with Russia. I consider it necessary to prohibit the importation into Ukraine of all Russian goods except those without which we cannot exist. For example, in a year or two to allow the export of the same coal as our CHP plant would not be reconstructed on the use of Ukrainian coal. The same applies to oil. The Ukrainian party shall ban the import of chocolate and sweets, but for some reason does not prohibit the import of household chemical goods which we ourselves can produce. The systemic approach of the state is not here,” – said Savchenko.

According to him, Ukraine should increase the export of goods to Russia and the occupied territories.

“Why the government had not expanded the list of prohibited goods from Russia? There are some nuances. First, about 5% of employees at top positions in the Cabinet, the national Bank and other relevant agents. Before it was even more – up to 10%. Are also lobbyists. There are banal economic interests. Therefore, we do not have a holistic, proper policy on trade with Russia. It is important for us as much as possible to sell their products in Russia and the occupied territories, but to buy from Russia at a minimum. This will allow us to become richer and at the same time leave less money of the Russian Federation. But so far everything is exactly the opposite. It is a losing policy. Probably, our officials do not know the macroeconomy,” said the source.

He stressed that Ukraine alone can inflict damage to Russia, equivalent to 0.4% of its GDP.

“If we completely stop importing goods from Russia, they will lose 0.4% of GDP. This is a pretty serious blow. All the sanctions combined cost Russia 1% of GDP. But Ukraine if desire alone could cause the Russians to the detriment of 0.4% of GDP. And it may be a blow to private companies, including investing in Ukraine. So, they have here their lobbies. In General, the Russian economy is much more powerful than ours. For example, rising oil prices, even at 10% they will block all the damage from sanctions,” said Savchenko.

Of the Russian Federation from 2016 abolished the regime of a free trade zone in Ukraine and has imposed a food embargo. This decision of the Russian leadership was a reaction to onset of action from 1 January of a free trade zone between Ukraine and the European Union. The Ukrainian government introduced in response to the mirror trade sanctions against Russia, which are reviewed annually and supplemented.