Business & Economy

Ukrainian economy shaken by Russian military threats

Kiev, Jan 30 (EFE).- The threat of a Russian attack or invasion is impacting the Ukrainian economy, which needs an injection of millions of dollars to stabilize it and the national currency, the hryvna. “Things are bad,” Svetlana, a seller at central Kyiv’s Bessarabski market, tells Efe.

“Even during the 2020 quarantine it was better. People are count every kopeck, all the prices have gone up,” the 48-year-old adds, blaming “bad harvests”, poor government management and the buildup of Russian troops near the Ukrainian border.

Ukraine’s president, Volodymyr Zelensky, admitted last Friday that the country’s economy has been affected by the panic created at the international level due to border tensions with Russia.

“Leaders of respected countries” have issued alarmist messages and warned of a potential imminent war, generating “panic in the market, panic in the financial sector,” he said.

Kiev will have to spend between $4 and 5 billion from the national reserve to stabilize the national currency, the president announced. “It is the price we pay for unbalanced information policy”.

Zelensky’s advisor Oleg Ustenko said that despite the difficult situation, the authorities “continue to work, the country must support its citizens and guarantee the normal functioning of the economy.”

“We count on the additional arrival of foreign investments in Ukraine,” he said, adding that it would be a “positive signal” that would provide economic stability.

By the end of 2021, inflation in Ukraine reached double digits for the first time in several years, to 10 percent, with an 11.3 percent increase in food prices.

Ukraine’s Deputy Prime Minister for European and Euro-Atlantic Integration Olha Stefanishyna blamed Russia for destabilizing the country’s economy through military tension.

“This has a strong impact on Ukraine’s economy and demands massive financial support to ensure the stability of the banking system,” she said.

The country invests in its banking system every week the equivalent of all the military assistance provided by the United States, she added.

In December, the government set the difference between wholesale and retail prices for bread, sugar and other foods at no more than 10 percent.

The government did not rule out the possibility of distributing food cards to families in need.

In just over a month, the Ukrainian currency has depreciated by around 7 percent against the US dollar, falling to its lowest level since 2018.

Liubov, a seller at the Bessarabski market, tells Efe that in Ukraine “we have pensions of 1,600 hryvnias, 2,100 hryvnias ($55 and 73), and payments for electricity and water are 3,000 and 4,000 hryvnias ($105-140).”

“You have to live with that”, the woman said, adding that she prefers “to leave political debates to the television”. EFE


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