Macroeconomic assessments and forecasts of the post-war recovery of Ukraine's economy

Abstract

The consequences of the invasion of the Russian Federation on the territory of Ukraine and a review of forecasts of the decline of the domestic economy in 2022-2023 are outlined. A special place is given to the initial conditions for forecasting the post-war recovery of Ukraine, first of all: attracting investments and achieving a high rate of accumulation of fixed capital, which will ensure a shorter period of economic recovery, maintaining moderate inflation, restoring macroeconomic stability. A historical review of the post-war recovery of the national economies of Germany, Japan, and Israel, which recorded high levels of gross fixed capital formation rates in 1950-1958, was elaborated. The economic expediency of building up fixed capital to ensure economic growth was noted. It is shown that the accumulation of investment resources and their effective using were the main priorities of the policy of post-war economic recovery in countries after the cessation of hostilities. An instrumental analysis of the relationship between GDP, the rate of gross fixed capital formation and inflation was carried out, the results of which confirmed the positive influence of the rate of gross fixed capital formation and the negative impact of inflation on the dynamics of GDP according to the data of the economy of Ukraine. Calculations showed that achieving the rate of gross fixed capital formation up to 30-35% of GDP will contribute to the rapid recovery of the post-war economy of Ukraine. It is noted that in the post-war period, the Government of Ukraine, in cooperation with the NBU, must implement a balanced policy of ensuring macroeconomic stability, aimed at maintaining a balance between strengthening social support for the population, stimulating the development of economic sectors, and maintaining an acceptable level of inflation and a stable hryvnia exchange rate. Risks and threats with difficult-to-predict consequences for Ukraine's economy are presented, the main ones of which should be noted: the continuation of Russia's war against Ukraine after 2023 and the escalation of hostilities on the territory of Ukraine with the strengthening of the impact of the devastating force majeure shocks of the global recession on internal economic processes.