Financial crisis in Ukraine 2008: cause and effect
The catalyst for the financial crisis in Ukraine 2008 was the uncontrolled growth of money supply. Issuing funds have led to increased demand for products, and as a consequence to higher prices. Thus, the causes of the financial crisis caused by itself economic model of Ukraine. Stimulating the economy through the credit through interest on loans. To repay the loan, the person or company should in the next year to work better than the previous one, to cover the loan costs.
General economic indicators
According to Goskomstat data, real GDP in Ukraine in 2008 grew by 2.1%, inflation was 22.3%. According to the treasury at the end of December 2008 the total public and publicly guaranteed debt of Ukraine has increased to 24.121 billion dollars, with a total of UAH equivalent government debt rose in 2008 by 2.1 times, mainly due to the rapid devaluation of the Ukrainian hryvnia, the November -December - by 94.1%.
Devaluation of the hryvnia and the situation with the dollar loans
In September 2008, began the fall of the hryvnia against the USD, which in October turned into a panic on the currency market.
In November and December, many commercial banks unilaterally raise the interest rates on previously issued hryvnia loans - on average half as much. As of December 11, 2008 the official exchange rate of 7.47 UAH /USD. Foreign currency loans only to individuals amounted to 191.7 billion hryvnia, up from 130 bln. In October exclusively due to the fall of the hryvnia. Since November, banks stopped to credit individual.
In 2008, the ukrainian hryvnia depreciated by 38% against the USD.
Unemployment
The unemployment rate on average for the 9 months of 2008 was 6.5%. According to Goskomstat, the unemployment rate in November 2008 compared with october2008 increased by 20.7% - to 639.9 thousand.
Population incomes
The average salary in 2008 according to state statistics committee data was 1806 (225 USD) hryvnia per month. Because of the economic crisis, starting in September, the average salary decreased. However, the biggest drop of incomes was in the metallurgical sector, engineering and coking industry, where wages began to decline since august.
The impact of financial crisis 2008 for Ukraine
- devaluation of the hryvnia, - the national currency of Ukraine;
- significant reduction in recourses exporting ;
- a sharp collapse of strategic industries;
- mass unemployment;
- price reduction on real estate objects;
- tangible problems in banking activities field.