MACROECONOMIC CRISIS DEVELOPMENTS IN UKRAINE

Abstract

Our research is focused on the architecture of crisis developments in Ukraine. Many scientists claim that the destructive impact of the COVID-19 pandemic is due to the "paralysis" of most segments of the world economy and growing uncertainty about future developments, which could create a decline in production such as the "Great Depression" of 1929-2033. Since 2008, the economy of Ukraine has experienced three recessions of different origin and heterogeneous stabilization policy responses. However, crisis developments of 2008-2009, 2014-2015 and 2020-2021 share important similarities in respect to dynamics of relative prices and sectoral output. Comparative analysis of crisis developments includes periods starting at 4 quarters before the crisis and lasting for 8 quarters after the crisis starts. Forecasts for the 2021Q2-Q4 period of the gross domestic product (GDP), industrial production, agrarian production, retail trade turnover, the current account balance and macroeconomic policy indicators are made with the ARIMA(n,m) automatic procedure. Our main findings may be summarized as follows: (a) it takes more than 8 quarters for GDP to recover, (b) it seems that the recovery from the COVID-19 pandemic is relatively rapid, mainly due to a steep improvement in the terms-of-trade, (c) regardless of the origin, i.e., domestic or external, crisis developments are followed by a temporary real exchange rate depreciation.