60% of Ukrainians say that they don’t have financial savings to cover even one month’s worth of expenses, according to a recent survey taken by the Ratings survey agency. And an economic slowdown around the world has economic advisors warning of a new economic crisis. However, the Ukrainian government has been developing measures to hopefully ease the financial burden on its citizens.
“Almost 80% of Ukrainians are worried that Ukraine is going to be subject to a protracted economic crisis. And more than 2/3s are worried that they won’t be able to buy necessary medicine,” notes the Rating survey.
And their fears may not be misplaced. Economists are already sounding the alarm about the possibility of an economic crisis worse than the Great Recession in 2008 – a second Great Depression, similar to the one in the late 1920s. The Ukrainian hryvnia has fallen precipitously, losing 15% of its value against the U.S. dollar since the start of the year – with further falls likely. And the government’s budget for March 2020 has already received 10.4% less revenue than forecasted, reports the government statistics agency.
All of this adds up to potential serious economic hardship for millions of working Ukrainians – but the government, led by Prime Minister Denys Shmyhal, says they’re working on it. “We’re planning to create a lot of jobs already in a few weeks. Particularly, we need people to fix the roads, to lay asphalt, and to clean up territories. Lots of open vacancies,” said the PM during a conference call that was initiated by Ukrainian President Volodymyr Zelenskyy on April 1, though Shmyhal declined to elaborate further at the time.
These jobs could be a lifeline for an estimated 700,000 Ukrainians who have lost their jobs due to the quarantine already, according to a statement made by the Ukrainian Chamber of Commerce and Industry president Gennadiy Chyzhykov.
4% of working Ukrainians have reported a total loss of employment in the Rating survey – and a further 32% have said they were made to take unpaid leave for the duration of the quarantine, meaning nearly 40% of Ukrainians have suffered a loss of income. As a result, with April rent and utilities fast approaching, Ukrainians may be scrambling for any help they can get.
“We see that the quarantine is necessary. I’m sure that it’ll save many lives. However, the government must find the means to help poor Ukrainians. Make up a list as quickly as possible, and count how much money we can give to them.” said Zelenskyy during the same call, addressing the PM. The list mentioned by the president would be a list of Ukraine’s poorest and most vulnerable citizens, who could be eligible for direct cash transfers from the government.
At the same time, PM Shmyhal announced that the government was already raising pensions to pensioners over 80 years old by approximately $18 per month, and that it would provide an additional one-time pension bonus of about $36, for all pensioners whose pension is under $181. While these numbers may seem small in more developed countries, for the average Ukrainian pension of $123.88, they can make a significant difference.
But it remains to be seen exactly how effective these measures will be – and how quickly they’ll take effect. The recent passage of the so-called "anti-Kolomoisky" law and land market reform could prove helpful to the nation’s finances and unlock International Monetary Fund support, though if Ukrainians don’t see an uptick to their incomes soon, then an economic crisis may be in the cards much sooner than expected.
/By Romeo Kokriatski
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