Fedorenko M., Lyashenko I.

National Technical University of Ukraine “Kyiv Politechnic Institute”

Inflation processes and the crisis in Ukraine: causes and consequences

 

Ukraine is found in deep economic crisis: considerable disbalance of basic macro indicators, inflation only for first quarter was 5,9% (attached to index planned in budget on level 9,5% for year), considerable GDP decline (almost on 30% for second quarter 2009), one of  the most devaluations of national money unit in the world (over 50% comparatively with previous year), abbreviation of solvent demand, increase of industrial production (the most for last 8 years) and increase of available income of population. At the moment, when the European economies demonstrate such phenomenon as deflation (for example, the producers prices in Europe fell down the most since 1999 year), and the world prices on petroleum and metals reached lowermost level, a home inflexible monopolized market characterizes by growth of prices (the markets on food goods rose on 3,1%) attached to presence of record corn resource and other agricultural goods for reduced prices. So, having a consumer inflation attached to underestimation of expenses in goods and services production process (inflation – 5,9% for I quarter, and growth of prices on industrial production – 3,1% accordingly). Also, by reason of disbalance between demand and proposition, lack of «cheap» monies, a market on additional solvent demand answers by scarcity of goods and filling by import. All that processes is a result of congested disproportions, and also lack of effective anticyclic adjustment, that is in inhibition of inflationary and speculative processes [1, 2].

The absence of last year inflation catalyzer - payment of discount deposits to population (in 2008 independently provided growth of inflation on 7%). What is the cause? «Gas war», hryvna devaluation more than on 50% (namely devaluation brought on inflationary processes and waitings, unlike spring 2008, when all took place on the contrary), freeing of monies from deposits in banks, disparity of real and planned in budget macroeconomic indicators, production slump and disproportion in guaranteeing of internal consumer demand, growth of red ink of balance of payments etc. [3, 4].

In 2009 year the experts forecast 17-20% growth of inflation for year, that can very essentially jounce on standard of population living and level achievements of previous 4-5 years in social sphere. Also probably in second half-year there is growth of prices on base resources, that's why in 2009 we will get a stagflation - high inflation level in combination with cutback of economic activity [1, 2].

In conditions of such critical situation there is a question: «What to fight with? With inflation, but conduct hard and unpopular social policy sterilizing «superfluous» monies in economy? Whether, on the contrary, shut out augmentation of unemployment rate, even untwisting this galloping inflation?» It is necessary to have a weighed balance, when these tasks will be fulfilled already not simply in-parallel, and complement each other then we will get a favorable synergistic effect [5].

In obedience to macroeconomics (Fillips conformity to natural laws for reverse interdependency between inflation and unemployment) simultaneous wrestling with inflation and unemployment – this is a discrepant and confrontation task. However, a Fillips theory reflects only a short-term dynamics and does not take into account such phenomenon as stagflation. So if takes place simultaneous growth of inflation and unemployment quite probably a reverse process, as a result of complex arrangements directed on their overcoming [6, 7]. Confirmation to this can be processes that take place in USA and Kazakhstan. Germany by its example for last 15-20 years demonstrates, that rise of salaries (and social standards too) negatively took unemployment rate on the rebound (clear and long trend to augmentation). In China on the contraryretraces tendency to abbreviation of salaries and underestimation of unemployment rate [8, 9].

Antiinflationary arrangements:

1.      Warning of inflationary waitings (strengthening of mechanisms of market system, forming of society trust );

2.      Effective monetary policy (carrying by central bank of stabilization antiinflationary policy by the medium of adjustment of discount rate, norms of obligatory reserves, operations realizations on open market);

3.      Abbreviation of budgetary deficit (for incomes augmentation counting or underestimation of state expenses );

4.      Minimization of external inflationary factors, mainly associated with shift over boundaries of speculative capitals (adjustment of money mass, rate of exchange) [6, 7].

Literature:

1.     Статистична інформація // Державний комітет статистики України. http://www.ukrstat.gov.ua/ 

2.     Промислова політика України // Міністерство промислової політики України. http://industry.kmu.gov.ua/

3.     Закон України про Державний бюджет України на 2008 рік від 18.12.2008 / Верховна Рада України. http://zakon.rada.gov.ua/cgi-bin/laws/main.cgi?nreg=107-17

4.     Закон України про Державний бюджет України на 2009 рік від 21.03.2009 / Верховна Рада України. http://zakon.rada.gov.ua/cgi-bin/laws/main.cgi?nreg=835-17

5.     Ukraine and the IMF // International Monetary Fund. http://www.imf.org/external/country/UKR/index.htm

6.     Круш П.В., Тульчинська С.О. Макроекономіка / П.В. Круш, С.О. Тульчинська. - К., 2005. - 400 с.

7.     OECD Factbook 2009: Economic, Environmental and Social Statistics // Organization for economic co-operation and development. http://www.oecd.org/

8.     Statistics by theme. Economy and finance. Population and social conditions // Eurostat. http://epp.eurostat.ec.europa.eu/portal/page/portal/

9.     Стратегічні пріоритети // Національний інститут стратегічних досліджень. http://www.niss.gov.ua/