Over 150 representatives of international organizations, businesses, the banking sector, the expert community, mass media, the public sector, and the diplomatic corps gathered at the National Bank of Ukraine (the NBU) to discuss the overall results of the previous year and present the NBU’s 2019 Action Plan.
“Our policy is built on dialogue, which lays the foundation of our success as a central bank. Low and stable inflation, the reliable, transparent, and sound banking system, developed financial markets, and an investment climate that favors economic growth and widens the international horizon are the objectives that we pursue. That is why it is important for us not only to be heard, but also to receive feedback from our stakeholders,” said NBU Governor Yakiv Smolii in his opening address.
This year, as before, the NBU will aim its activities at ensuring price and financial stability as the foundation for sustainable economic growth by reaching the seven goals of the medium-term Strategy of the NBU and by implementing the 2019 Action Plan.
The successful meeting of the NBU’s strategic goals requires the absence of substantial shocks in the internal and domestic environments. If the risks threatening the global and Ukrainian economies materialize, they could jeopardize the NBU’s ability to take actions and conduct key activities that are required for achieving the strategic goals.
The NBU surveyed the participants of the meeting with clients and partners, who said they considered the double elections in Ukraine to be the biggest threat for the Ukrainian economy. The readers of the NBU’s official Twitter channel expressed similar views when surveyed.
This particular risk became the key topic of the panel discussion Development Potential of the Economy and the Financial System. The participants discussed why the financial sector, businesses, and the general public pay special attention to this risk and how to protect the Ukrainian economy from side effects of its materialization.
Kateryna Rozhkova, First Deputy Governor of the NBU:
The key challenge for Ukraine is the lack of long-term strategic thinking. Institutions are the driving force that ensures the development of the economy. The national vision and strong public institutions are what guarantee our economy’s development.
Serhii Verlanov, Deputy Minister of Finance:
The hardest thing is to foresee the slowdown in the global economy that will influence directly and indirectly the risks that are listed in the survey. That is the reason why we applied the concervative approach to planning the revenues for this year.
Viacheslav Klymov, co-founder and member of the supervisory board of Nova Poshta:
The main challenge for businesses this year is not the elections themselves but rather the populism surrounding them. Under populist conditions, business becomes more cautious and behaves in a more conservative way. Therefore, we urge government authorities and the NBU to lift the burden on business and remove redundant regulation in periods leading up to crises. It is also important to resume lending, which is particularly needed by small and medium-sized enterprises.
Anna Derevianko, Executive Director, European Business Association:
A lot of things will depend directly on the elections. That is why it is important to adhere to sound judgement, resist populism and ensure macroeconomic stability to enable investors to forecast their processes.
Volodymyr Lavrenchuk, Chairman of the Board, Raiffeisen Bank Aval:
The year 2018 was marked by the highest macroeconomic stability in the modern history of Ukraine. The elections as such are not a challenge. The challenge is anything that may jeopardize the macroeconomic stability and the core principles of the banking sector’s operation – legal and macroeconomic protection of investors.
Goesta Ljungman, Resident Representative of the International Monetary Fund in Ukraine:
Elimination of macroeconomic disbalances during recent years laid the groundwork for stabilization of the economy. This achievement should be preserved through sound economic policy. Sustainable growth requires higher investments. Improvement of the business environment, particularly through anti-corruption measures, will help in this process. Transformation of the NBU into a respectable, modern, independent central bank with a strong governance structure is an important step for Ukraine. The NBU’s independence is what guarantees macroeconomic stability. It is also important to achieve progress in privatization, tax administration reforms, financial reforms, judicial reforms, and reforms in the energy sector. Reforms in the land market have also become imminent.
Dmytro Sologub, Deputy Governor of the NBU:
If we look at the modern history of Ukraine, we can see bad times, we can see better times. However, it is sustainable growth that we have never been able to see yet. In my opinion, such volatility is the reason behind the slow rates of external and internal investments as well as of the high level of shadow economy. The main task we have yet to accomplish is to make the growth consistent and establish the institutions that will support this process. The consistent economic policy should be continued. Then investors will gradually start believing in Ukraine. To that end, we should establish institutions, and the strong institutions will help us overcome the risks.