REUTERS
Wholesale trade in Ukraine declined by 12.8% last year as compared with 2014, while retail trade turnover shrank by 20.7%, indicating a significant decrease in cash expenditures by households to buy goods and a reduction in individual consumption, which may be warning signs of the economic collapse, according to analysts from Da Vinci AG.
"As retail is traditionally one of the main sources of replenishing the state budget in Ukraine, the current trend is an indirect sign of lower budget revenues," the company said in its forecast.
At this, the company notes that results at the end of 2014 were more positive. In particular, a decline in wholesale trade was 17.9% as compared to 2013, and retail was down by 8.9%. The worse indicator of the wholesale trade decline in 2014 was due to the occupation of Crimea, and parts of Donetsk and Luhansk regions. However, retail trade contraction by a third in the last two years signals a serious decrease in households' income and the worsening of their purchasing power, Da Vinci AG analysts said.
They express concern over the fact that the rate of the decline in retail trade has been accelerating (from 8.9% to 20.7%) amid the slowdown of wholesale trade contraction (from 17.9% to 12.8%).
This situation suggests that the country is facing problems not only in the real economy, but also in the shadow economy. The "cushion" has been shrinking, and so have households' informal incomes, making people more vulnerable to uncertainties of external markets that the country is focused on. Thus, the government has largely failed to compensate for export weakness by stimulating domestic demand. It can already be seen that the current crisis has deeper roots than the crisis in 2008-2009, according to the company's analysts.
The collapse of the shadow economy against the background of the deep crisis in the real sector may evidence the collapse of the economy, Da Vinci AG concluded.
As UNIAN reported earlier, analysts predict that even with the lack of activity of the National Bank on the currency market, the dollar exchange rate fluctuations will unlikely surpass the maximum figure of UAH 28 per U.S. dollar after the receipt of the next tranche from the International Monetary Fund in spring.