The economic policy of the government strengthens crises and structural degradation of the national economy. For the fourth consecutive year, have been proposing to approve a budget for seizures, which proposes neither stimulating economic development nor maintaining the minimum necessary standard of living for citizens. The proposed draft budget-2018 is dangerous for Ukraine.
The draft budget for the next year does not ensure economic recovery. The presentation of budget priorities for 2018 does not say a word about what the government intends to do with the ongoing systemic crisis in industry, how to restore export volumes, increase investments and create jobs.
In the government’s vision, all the locomotives of growth in 2018 are the support of the agro-industrial complex, the military-industrial complex and the construction of roads. At the same time, the total expenses for the support of the agro-industrial complex in 2018 (UAH 7.3 billion) are 3-3.5 times less than the agrarians received on special regime refund of VAT until 2017.
The submitted draft budget contains no incentives for local self-government. “As in 2017, UAH 10 billion will be allocated to support regional development in 2018. Moreover, inflation for these two years will be at least 25%.
Еhe draft budget-2018 is built on a low inflation forecast of 7%. “Next year, inflation will be at least 10-12%, which is caused by significant rates of devaluation (in the budget declaration the Ministry of Finance forecasts the average annual rate of UAH/$ 29.3, and in the draft budget – UAH/$ 30.1 at the end of 2018). Underestimating inflation, the authorities underestimate so low social standards and social security costs.
The economic growth forecast of 3% is also not realistic. The authorities have not made a single step to achieve such growth. In 2017, 3% GDP growth was planned, but in reality, there will be no more than 1.7%. In order to count on more, it is necessary to solve the key problems of the state – establishing peace in Donbas, ending its economic blockade, restoring the sales markets lost over the past three years. There is no one recipe for solving these problems in the current government.
The position of the Opposition Bloc: budget-2018 should become a budget of development. We demand a minimum of 4-5% of GDP to be allocated to capital expenditures - the development of infrastructure and the restoration of Donbas. Together with extrabudgetary steps to support the industry, this will ensure its growth by 5-6% per year.
It is necessary to revise the living wage, which is the base figure for a number of social payments - and this refers to benefits for the most vulnerable citizens. The OPPOSITION BLOC requires it to be raised twice – from UAH 1624 to UAH 3200.
The budget should guarantee decent wages. “Therefore, we propose to raise the minimum salary by 1.6 times – up to UAH 5000. The budget should provide fair pensions. The demand of the Opposition Bloc: the minimum pension is UAH 3500 instead of the current UAH 1322.
The realism of the budget-2018 will be the last test for the authorities. Either the budget for the development of the economy and the improvement of people’s lives, or the change of power through re-elections.