In Ukraine held the second round of presidential elections-2019 where wins Vladimir Zelensky. How will this affect the economy of Ukraine – journalists understood 24 channels.
1 that is immediately after the victory Zelensky?
2chto will be the hryvnia exchange rate?
3When will all change in the welfare of Ukrainians?
4Изменится the life of Ukrainians for the better?
5Действительно all that bad?
6От which will depend on the economic development of Ukraine?
From spoiler: the fact of the victory of Vladimir Zelensky in the second round of presidential elections of 2019 on the economy of Ukraine will not be affected. Not at all. It all depends on what he will do next. And that we actually do not know. But a number of assumptions, nevertheless, can be done.
What will happen immediately after the victory Zelensky?
From an economic point of view – nothing. At least until the end of the year did not change significantly. As explained 24 channel Board member of the International Union “the Institute for national policy” Marina Bagrova, the political factor is the most dependent of gray, the shadow of corruption in this sphere. Therefore, in a changing political environment, transit top political leaders, primarily affect the shadow corruption sphere.
The presidency Zelensky, according to her, the markets will react calmly. Of course, there may be small fluctuations, but they practically do not affect the welfare of citizens and enterprises and will have only speculative.
The new President in any case before the end of this year will be forced to continue the economic policy laid down by the old President. In addition, the President in the sphere of economy very indirect powers. Housing is a competence of the President and the government. However, with regard to the housing sector, the planned changes to may of the current year in this sphere have to happen in any case
What will happen to the hryvnia exchange rate?
For him to win Zelensky in General will not be affected. Except that, people will start to panic and buy foreign currency. But given the ratings Zelensky, panic until canceled.
In General, as explained by the managing partner of the Law Firm Pravovest Gleb Segida, foreign exchange market more dependent on business and foreign investors, cooperation with the IMF, EBRD, EU and so on.
“The amount of cash market is about 10-15% of the total turnover on the interbank market. Of course, the situation in the cash market affects the exchange rate. However, this is not a decisive influence. The main thing is the mood of the business and foreign portfolio investors, as well as the rate of reaction and a set of tools that will decide to use NBU. In recent months, the NBU, in spite of the reduction of inflation, not particularly in a hurry to loosen its monetary policy. This demonstrates that the national Bank is ready to deterioration of the situation on the market and chooses the tactics of avoiding significant fluctuations in the market (even reducing economic activity today through high interest rates). NBU may again increase the mandatory sale of currency earnings by exporters (30%), to impose limits on purchase of foreign currency and the like,” he added.
When will changes in the welfare of Ukrainians?
Fall. But they will not be associated with Zelensky and his victory. For example, in autumn we can expect the traditional fluctuation in the exchange rate, but it will happen not under the influence of political migrations, and due to the fact that increase of imports and repay foreign debts. In addition, will expand hryvnia emission (release into circulation of new currency) in connection with the slowdown in economic growth and rising state budget deficit.
The course we have been included in the budget not at the level of 27. From what he’s laid on quite another level, we have budget shortfalls in import VAT. On this basis, we understand that one way or another, the hryvnia will depreciate, because the other option she would have to – otherwise, we budget is not workable and will have more to do. The growing rate automatically increasing the dependence of the price of gas, which is composed of import prices and the value of the hryvnia. In the fall, “Naftogaz” will be offered again to return to the raising of a tariff for natural gas for population to the level of 10 thousand. In such hands, we can talk about what this has to do with Zelensky. But this is manipulation, because this waiting took place before the first round of elections. Just not talk about it,
– said the political expert Andrey Wigierski.
If you talk about what changes may result directly elect the President Zelensky here – a solid plot. Just because we still do not understand, nor what he will do, nor what will suit.
According to Segedy, much will depend on how the new President will interact with the Parliament and the government. And what configuration of political forces we see in the new Parliament in the autumn. “If the President will enter into a confrontation with the Parliament, do not forget that we have a parliamentary-presidential Republic. And Parliament will be able to block any of the personnel and legislative initiatives of the President (except the head of the presidential Administration, the NSDC Secretary, head of foreign intelligence – but it’s not the bodies that are not responsible for economic policy)”, – he explained.
Now, therefore, Ukrainians, politicians, and investors switched to the standby mode of the first things to say about the possibility of qualitative changes of life.
Will the life of Ukrainians for the better?
Not a fact. Uncertainty in economic policy Zelensky creates many reasons for the disturbing emotions. Before the newly elected President will have to resolve several significant challenges that will have to its fullest extent. One of the main Russia and its attempts to interfere in Ukrainian politics. Including through economic pressure.
Even before the second round of Russia declared a ban on deliveries to Ukraine of oil, oil products and coal. As the journalist Denis Kazan, gasoline, of course, will not disappear, but definitely more expensive. Consequently, the new presidential term is guaranteed to start with the rising prices. “In the script “public Servants” this was not, but welcome to the real world. Moscow’s actions put the next President in front of a simple choice – to deliberately humiliate and to submit for the next discount for gas/petrol, or continue the current policy of a complete break from Russia and Ukraine. Unlike the series, where the Russian factor just made the brackets and ignored, in reality it do not work. The Kremlin about yourself will always remind you” – he said.
Another significant risk – the cooperation with the IMF, which directly affects the macroeconomic stability of Ukraine. According to the Minister of Finance of Ukraine Oksana Markarova, without cooperation with the IMF, it is hard to imagine planning for the future of our state. The next government probably will also work with the IMF. To cease to be a debtor – Ukraine it is necessary to grow the economy. And for this, she said that privatization of state assets, reduction of the state share in the banking sector to less than 25%, active privatization and the withdrawal of the state from most of the companies in which it does not should be involved that are not strategic. There is also the factor that the removal of the moratorium and introduction of a land market. Another extremely important factor is judicial reform. That is what is really holding back the arrival in Ukraine of investors.
On the one hand, the team Zelensky has stated that they plan to continue cooperation with the Fund and based on its program, is planning to implement much of what is necessary to the economic growth of Ukraine was held. On the other hand we still don’t know how and with whom he plans to implement his program. Meanwhile, the reality may be quite threatening to this cooperation.
For example, revenge ex-owner of “Privat” Igor Kolomoisky after the defeat in the elections Poroshenko excludes no one. He has already filed a lawsuit to the state for moral damages of two billion dollars for the Bank’s privatization, and the recent decisions of Ukrainian courts are not yet in favor of the Ukrainian state. “Thus, Kolomoisky may well get “PrivatBank”, and some compensation. That is, in the worst case, Ukraine could suffer a huge amount,” – said the founder of the investment group “Univer” Taras Kozak.
In addition to the potential losses of the Ukrainian economy at least seven billion dollars, it will also call into question the investment attractiveness of Ukraine. “In fact, those three judgments that we receive regarding “PrivatBank”, a very negative impact on the investment attractiveness of Ukraine. If it continues in the same vein, the expectations are bad,” explained economic expert Sergey Fursa.
Economy three years of growing – and growing real incomes of population, GDP, and business. That is the situation for campaigns is great, but now there’s a critical chance that it will be changed, if we lose cooperation with the IMF. It’ll ruin our macroeconomic stability, as a result, we get a very different economic situation,
See the full interview with Sergey Fursov:
Is it really all that bad?
Not a fact. Uncertainty in economic policy Zelensky creates a lot of reasons for positive expectations.
According to the Executive Director of the international Fund blazer Oleg Ustenko, it just seems that the President is not responsible for the economy, but it very much depends on its political will to fight corruption, implementation of reforms, especially the judicial. And despite the fact that we still don’t know how effective it will be Zelensky in the fight against corruption, the fact that the probable change of the political system could become very positive for the economy of the state.
Economics is not about numbers, it’s also expectations and trust. “When countries change the power, especially in such as Ukraine – with unstable democratic institutions, citizens will form positive expectations… We heard that there will be a strengthening of anti-corruption fight that system of governance is outdated and should be changed, and that we need to change the demographic situation in the country and to impose economic passport. So a change of power could have a very positive effect on active attention on the part of foreign investors”, – said Ustenko in one of his interviews.
At the same time, he also repeatedly stressed that due to such systemic changes, Ukraine has a chance for a cosmic jerk. “Even minor shifts in the quality of the business climate will have a tremendous economic effect. Growth will exceed all expectations,” – said Ustenko.
With regard to cooperation with the IMF, says Bagrov, the situation is far from apocalyptic. The IMF is working with Ukraine on the basis of international agreements and programmes. At least for the next two years, IMF will not abandon cooperation with Ukraine.
Since the new President will be able to form a Cabinet only after the autumn parliamentary elections, and the final formation of the Cabinet will only happen in the early 2020. In addition, for non-cooperation with the IMF is necessary to ensure sustainable development of the national economy. I don’t think the new head of state will be able to create in the coming years, favorable conditions in the economy, which will contribute to the rejection of forced cooperation with the IMF,
Segida also added that there will be decisive the role of the Parliament and the government, not the President. The President can block the Parliament adopted the laws necessary for the IMF. If the Parliament will not have 300 votes to overcome a veto, it can block the cooperation with international partners.
Accordingly, 300 votes from deputies reduce any premeditated intentions of the President. As MPs vote for the appointment of the head of the NBU, the Prosecutor General, the Minister of foreign Affairs, SBU heads of those agencies, which may affect the cooperation with foreign partners nominated by the President,
– he explained.
Which will depend on the economic development of Ukraine?
From the same, what did it depend on always.
We have a driver of economic growth is not the industry and consumer demand. That is, by and large, household spending. Household spending we can’t fall, because they already fell of the train a long time and are in the recovery period. If we start from some pre-election promises, Zelensky they are not much different from Poroshenkovyh. So I see no reason to pass judgment that the economy of the end. Trouble will not happen. From what trump was the President of the United States has not collapsed,
– told Wigierski.
Investors, probably, soon will wait and look again. On the basis of what they saw, they will draw conclusions, and we will be able to make predictions.
The Executive Director of the Center for economic strategy Hlib Vyshlinsky believes that an extremely important factor in our development is to preserve the independence of the national Bank and the creation of independent from political influences of courts, regulatory and competitive commissions.
About the same forecast was voiced before the second round of elections financial expert Tymofiy mylovanov.
Economist Sergey Fursa is also believed that to demonstrate its willingness to fight corruption Zelensky will be much easier than everyone else.
Reducing the level of corruption and deregulation should improve the conditions for doing business, which in turn will lead to greater investment. This, in turn, together with economic growth, should improve the welfare of Ukrainians. About how effectively Zelensky will be able to contribute to the realization of this, at first glance, quite logical schema – will know soon.
When Zelensky will become President of Ukraine?Now comes the counting of votes. The results of processing almost 100% of the ballots, the leader Vladimir Zelensky – he received more than 73% of the vote. Petro Poroshenko is about 24.5%. Prior to may 1, CEC should formally name a new President of Ukraine. The inauguration of Vladimir Zelensky shall be held not later than 3 June.