Ukraine needs to ensure a growth by an average of 6% per year over the course of 20 years to achieve Poland’s current level, while partial reforms and an average growth rate of 4% will only solve this problem by half, IMF Resident Representative in Ukraine Goesta Ljungman has said.
He said at a macroeconomic discussion at the American Chamber of Commerce in Kyiv this was a long-term project, as it is impossible to complete the reforms in several years. Ukraine must support these reforms for all 20 years, it takes patience to at least catch up with its neighbors, he added.
The official explained that structural reforms would allow providing investments necessary for such a growth and increasing productivity.
He clarified that the matter concerns achieving a level of GDP per capita of almost $30,000 at purchasing power parity.
Dimitar Bogov, the leading economist in the region of the European Bank for Reconstruction and Development, supported his opinion saying that Ukraine needs to grow by 7% per year in order to catch up with the neighboring economies.
According to him, if Ukraine reduces the lag in the management level by 50% compared with the G7 countries, this will add 1.2% growth annually. He said the main threat was the loss of macroeconomic stability, which is the basis of growth.
Ljungman recalled that Ukraine was among the 18 countries in the world whose economies declined from 1990 to 2017, ranking fifth from the end, an average of minus 0.2% annually.
