Search

It is substantiated that under wartime conditions, formation of a new global nature protection architectonics and decentralization of power, the solution of ecological problems of socioeconomic development passes into a new financial and investment dimension, which requires diversification of sources of financing of capital investments and current costs in environmental protection. It is determined that in the dynamics of the nominal amount of financing of capital investments and current expenditures in environmental protection in the context of the main nature protection measures in 2000–2020, in general, there is an upward trend, which is caused by inflation-devaluation processes, rather than a real increase in assignations to environmental projects both in the public and corporate sectors. It is identified that in 2000–2020 there was a significant difference between the amounts of financing of capital investments and current expenses in the direction of increasing the amount of financial support for the operation and maintenance of environmental infrastructure, rather than their renovation and modernization. It is substantiated that the chronic deficit of financial and investment support for solving ecological problems is caused by excessive unification of sources and methods of financing the renewal of the network of environmental infrastructure objects and rationalization of the use of natural raw materials, which requires diversification of fiscal, budgetary and credit investment instruments of the environmental protection industry. It is determined that increasing investment flows in the environmental sphere of Ukraine depends on the inclusion in the range of priorities of the national environmental policy of the dominants of international environmental conventions, primarily the New Climate Agreement, which will allow obtaining financial preferences from global environmental funds and foreign governments. It is substantiated that the intensification of environmental activities at the level of local self-government will become possible due to an increase in the share of deductions of the natural resource rent and environmental tax to special funds of budgets of territorial communities, which will ensure targeted linking of eco-resource payments to solving the most pressing ecological problems of territorial entities. [ABSTRACT FROM AUTHOR]

Considering investment decisions on a particular business in the country (including the investment company), the actual issue is the level of its investment efficiency, taking into account the alternative and the level of devaluation of the national currency or inflation. The aim of the work is to determine the minimum allowable level of investment efficiency of Ukrainian business, taking into account the alternatives and features of the national currency, failure to achieve which makes Ukrainian business investment-inexpedient in the long run. A method for determining such minimum allowable level of investment efficiency is proposed, which involves calculating the amount of average annual growth of the stock index selected as the best investment alternative, the average annual dividend on such stock index, and the average annual devaluation of the national currency against the currency of such stock index. It is determined that the level of devaluation of the national currency in Ukraine against the US dollar exceeded the official inflation rate, which is why the above method took into account the average annual rate of depreciation of the national currency. The best alternative for financial investment is the US stock index S & P-500 and, consequently, investment in shares of corporations that are part of this index. Taking into account the specifics of the national currency and investment alternatives for Ukraine, the minimum level of investment efficiency of capital use by economic entities is set at 26.68 %.This interest rate (namely: 26.68 %) should be used to assess the feasibility of investment projects in Ukraine in order to calculate the classic indicators: net present value (NPV), internal rate of return (IRR), profitability index (PI), present term payback (DPB). In addition, the size of return on assets and return on equity at Ukrainian enterprises must be at least 26.68 %. It is determined that the average enterprise in Ukraine does not meet the conditions for achieving the minimum required level of return on assets and return on equity of 26.68 %. Only a few businesses in the country meet this condition, and most of them - only in terms of return on equity. In order to preserve and increase the capital of investors, Ukrainian investment companies should, in most cases, invest in the shares of the world's leading corporations, which are part of the US stock index S & P-500, rather than in the enterprises of their country. The high level of inflation in the country is identified as an important factor that negatively affects the efficiency of the business in Ukraine and, especially, the activities of industrial enterprises with a significant production cycle. In addition to the depreciation of the assets of economic entities, inflation causes the phenomenon of paying the tax from a relatively zero level of efficiency. Taking into account such taxation in Ukraine, the minimum allowable level of investment efficiency of business is 29.64 %. Conditionally zero level of business efficiency is achieved when the return on assets of the entity is equal to the average annual rate of depreciation of the national currency. The higher the inflation rate in the country, the more taxes are paid at a relatively zero level of efficiency, and the higher the value of the minimum allowable level of investment efficiency of the business in proportion to the income tax rate and the average annual devaluation of the national currency. The presence of a high level of inflation in the country and an income tax creates conditions for the outflow of investment capital to other countries. [ABSTRACT FROM AUTHOR]

The article substantiates the expediency of modeling the development of national industry taking into account how the main interconnected key sectors of Ukrainian economy (not only processing and extractive industries, but also agriculture) are developing, as well as taking into account the factors that cause changes in this development over time. Based on previous researches, multiplicative production function has been chosen as the base for building the model, which was modified by taking into account the peculiarities of the Fourth Industrial Revolution and the specifics of individual industries in Ukraine. The economic-mathematical model of long-term development of specified branches of economy of Ukraine in the conditions of digitalization was proposed, in which the value added in the branch is the dependent variable, and the classic components of production functions (labor and the capital) are the independent variables, as well as the new factor - digitalization, and factors, specific to individual industries (world food price index for agriculture and world raw material price index for the extractive industry). A specific feature of the model is also the use of correction factors that reflect the change in the return of factors over time and increase the accuracy of calculations. In addition, separate models have been developed to calculate each of the main factors, based on the dynamics of investments, taking into account the recursive influence of value added, propensity to invest, the condition of the world economy and other specific factors. The calculation of value added in agriculture, extractive and processing industries of Ukraine in 2010-2019 was performed using the model. The adequacy of the model was validated based on the results of its parameterization, which showed sufficient accuracy for the implementation on practice, as the average absolute error of approximation ranges from 2.94% to 4.14% depending on the industry, with abnormal 2014-2015 excluded from the calculations. The value of GDP in the country as a whole was calculated on the basis of the results of value added calculations by key industries. Taking into account the fact that the proposed set of models does not include all industries, a regression model was used to calculate GDP, to which value added for the identified key industries was used as factor. It is established that the proposed model is quite accurate and can be used to calculate the GDP of Ukraine on the basis of value added calculations in agriculture, extractive and processing industries. Given the prospects of practical use of the model for management decisions, the elasticity of the main driving factor (investments) of the development of individual industries was assessed for the main variables, which, in particular, showed that the exchange rate of hryvnia to the US dollar has a negative impact on investments, and the most pronounced - on investments in fixed assets of the processing industry. This questions the widespread idea that the devaluation of the hryvnia stimulates domestic production. [ABSTRACT FROM AUTHOR]

Copyright of Scientific Proceedings of Ostroh Academy National University Series, Economics is the property of National University of Ostroh Academy and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The article aims at studying the current state of Ukraine’s national debt and developing directions for its optimization. It is established that the currency component in the structure of Ukraine’s national debt is slightly lower than the threshold level for the currency component in the debt structure set by the IMF for developing countries. This structure of Ukraine’s national debt indicates the dependence of the domestic financial system on currency exchange rate fluctuations and the need to increase foreign exchange costs for servicing debt obligations. The amount of debt on loans from international financial organizations and government agencies of foreign countries comprises about a third of the total amount of national and guaranteed debt, indicating significant support Ukraine receives from its international partners, especially from the International Monetary Fund. The currency component in Ukraine’s national and state-guaranteed debt indicates high vulnerability of its financial system to currency shocks. It is established that the structure of Ukraine’s national and state-guaranteed debt by types of interest rates is quite optimistic and indicates a low vulnerability of public finances to interest rate risks. The size of Ukraine’s national and state-guaranteed debt in hryvnia equivalent increased during 2013–2020 by more than 4.4 times, and its growth in USD was quite moderate. It is determined that during 2020 the size of Ukraine’s national and state-guaranteed debt increased by 27.7% in hryvnia equivalent, due to the following situations: financing the state budget deficit; the allocation of funds to combat COVID-19; national currency devaluation, etc. The ratio of national and state-guaranteed debt to GDP, reaching a maximum of 81.0 % at the end of 2016, gradually decreased to 50.3% at the end of 2019, which corresponds to the norm established by the national legislation. However, the values of this index for the period under review exceed the threshold level of national debt set by international standards for countries with emerging markets (30-50 % of GDP). It is shown that the 2013 2019 period saw a tendency to increase the total cost of repayment and servicing of Ukraine’s national debt, which creates the risk of refinancing national debt, causes additional pressure on the state budget and GDP, and limits Ukraine’s ability to finance its social and economic goals of social development. The main risks for Ukraine’s debt obligations are highlighted, and ways to optimize them are outlined. The need to establish a National Debt Management Agency, the activity of which would help reduce both the debt burden and the cost of public debt servicing, is substantiated. [ABSTRACT FROM AUTHOR]

Copyright of Financial & Credit Activity: Problems of Theory & Practice is the property of University of Banking of the National Bank of Ukraine and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The article investigates the impact of devaluation shocks on Ukraine's economy. The author argues that the mechanism of exchange rate effect is mixed, with positive and negative effects of exchange rate fluctuations affecting the competitiveness of the internal and external sectors in different directions. The author considers three waves of devaluation of the hryvnia (1998-1999, 2008-2009, and 2014-2015) and analyzed their effects. It is shown that hryvnia devaluation in 1998-1999 had the largest effect, which was initially manifested in the growth of exports in 2000, being its peak observed in 2001-2004. The share of imports in the trade balance did not significantly decrease, because Ukraine had a high degree of energy dependence and needed a lot of components for domestic production. However the high prices on international commodity markets contributed to the formation of the raw-material character of Ukraine's exports. The second wave of devaluation (2008-2009) caused by the global financial crisis did not have a large positive impact on Ukraine's trade balance, as the international markets saw a decline in global demand for goods and services. The depreciation of the hryvnia had a negative impact on domestic output, because the total negative effect of currency devaluation considerably affected the sectors, which were oriented to the domestic market and had a significant share of imported raw materials and energy in their cost structure. The third wave of hryvnia devaluation (2014-2015) to some extent contributed to the reduction of the negative trade balance, but the full effect of the hryvnia depreciation is difficult to assess because the balance indicators were calculated less the lost territories. The raw material orientation of Ukrainian exports contributed to a hypertrophy of the domestic economy and the emergence of "Dutch disease", which showed itself in the sector of semi-finished goods. As a result, there took place a substitution of more complex items with more simple ones having lower added value. Along with the impact of devaluation shocks on Ukraine's trade balance, the author examines the relationship between devaluation of the hryvnia, inflation and living standards. It is shown that, between inflation and devaluation, there is a close relationship, which is explained by the technological structure of Ukraine's import dependent economy. It is concluded that high inflation and devaluation of the hryvnia make no contribution to the stability of money circulation in Ukraine and lead to lower living standards. The author recommends diversifying this country's export structure towards a significant increase in the share of high tech products and services. [ABSTRACT FROM AUTHOR]