Growth of Ukraine's wellbeing following its joining the Customs Union with Russia, Belarus and Kazakhstan will drop by 0.5%.

Those data were made public by the Institute for Economic Research and Policy Consulting at the round table “Price of borders: experience of foreign trade liberalization in Ukraine, Georgia and Azerbaijan,” Tuesday, September 24.

“Results of simulation following the deeper integration with Russia, Kazakhstan and Belarus within the Customs Union frames in the static formulation of a model will produce a change in the wellbeing to minus 0.5%, in the stationary formulation - minus 3.7%,” the studies' research says.

According to the author of the research, director for scientific affairs of the Institute for Economic Research and Policy Consulting Veronika Movchan, calculations were carried out based on a mathematic-simulation model, built on data from the State Statistics Service of Ukraine with the assumption that factors are fully mobile with the exception of coal mining. In addition, the model did not consider the effect of reducing gas prices and export duties. "Regional integration has no direct influence on the agreement with Gazprom, and therefore the price of gas. Reduction is based on a discount," she said.

According to the research, even if prices are cut, this will increase Ukraine's dependence on the energy carriers, will suppress stimuli for their own production and will give a negative impetus for investment in energy-saving technologies.

At the same time, as reported, according to calculations of other specialists from the interdepartmental expert group headed by the Government's Representative for Cooperation with Russia, CIS and EurAzEC Valeriy Muntiyan, Ukraine's joining the Customs Union and the Common Economic Space may lead to GDP growth in the country at the level of about 2% annually.


 

Ukrinform