Author Topic: How linked is the Ukrainian economy with Russia?  (Read 756 times)

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Offline clanholmes

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If it takes 4-5 years for the Russian economy to mend, how is that going to effect Ukraine?

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Kislovodsk, Russia. August 10 (Interfax) - It will take four to five years for the Russian economy to recover in real terms, Deputy Prime Minister and Finance Minister Alexei Kudrin told journalists in Kislovodsk on Monday.

"I think it could take four to five years to return to the previous level of GDP in real terms and for the economy to recover from the decline of about 8.5% to be seen this year. Growth of 1% is already planned for 2010. This means that we will have less revenue in real terms over these four to five years. This means that we should calculate our programs for a period of four to five years and not for one year," Kudrin said.

The government "has started to better understand the nature of the crisis and this has been reflected in the forecast for three years," he said. The fact that it will take four to five years for the economy to recover and not one year requires "a better selection of priorities and a better selection of social support measures," he said.

"We understand this better today - the nature and the prospects of this crisis as well as the likely timeframe for getting out of it and, accordingly, the measures we need to take in our economy," he said.

A considerable amount of federal budget expenditures have already been optimized, he said. "We haven't used all the reserves earmarked for this year, that wouldn't be efficient everywhere. I think we have a good margin of safety to get through the coming years," Kudrin said.

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Offline David Rochlin

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Re: How linked is the Ukrainian economy with Russia?
« Reply #1 on: 03:47 11-Aug-2009 »

Ukraine will probably hurt the most, because fewer Ukrainians hold high paying jobs in Russia and send money back home.

I think Ukraine's biggest exports to Russia are probably agricultural, and machinery,
 engines, truck and aircraft parts, and weapons systems.

Agriculture probably will be affected only a little.  But, Russia is aggressively improving domestic farm production, trying to create an agri-"Gazprom."

Weapons and Aircraft will probably continue to hurt for many years. 

Global stimulus programs are creating shortages and backlogs of heavy construction machinery.  This bodes well for Ukrainian engine production, as even if Ukraine doesn't sell directly to those programs, scarcity will make products easier to sell.