Middle of the week thought: optimistic pessimism or pessimistic optimism

Tags: macroeconomics, Ukraine, Yevhen Pentsak

The Fourth Research-to-Practice Conference “Ukraine’s Integration into European and International Financial Community” was held under the auspices of NBU and reported a number of interesting figures reflecting growth of domestic economy.

On June the 4th, 2009 I was on a formal visit to the Fourth Research-to-Practice Conference “Ukraine’s Integration into European and International Financial Community” held at Lviv Bankers’ College under the auspices of National Bank of Ukraine and took floor on a range of issues. The speakers there were split into three groups: state administrating representatives, scientists, and NBU officials.

State administration representatives were persisting in the opinion that a dramatic change in NBU’s policy and in banking system practices is strongly expected in order to raise the credit availability for businesses, secure fulfillment of budget regulations as well as eliminate mass bankruptcy risks in the regions.

Bankers and NBU officials postulated that credit rates cannot be lower than national inflationary level as adjusted for business risk factor. National bank analysts looked surprisingly optimistic: “economic activity will have boosted not later than early next quarter due to interest rates decline, gains of lending market and notable push in currency exchange rate”. Regrettably, the direction of the “push” was not specified. The aggregate model as shaped and presented by NBU, prospected 15,6% inflation rate, growth of CPI figures up to 6,3%, GDP drop as low as by 11% and national debt increase up to UAH 190 billion by the end of this year. For the quarter to date, GDP dropped 20, 4% due to NBU estimates. Sharp GPD’s rally is expected by them early in the year 2010 as contrasted to the prior decline. In informal discussions bankers expressed concern over the new wave of financial crisis and increase in the number of banks with temporary administration as well as the banking sector shares’ sagging.

Scientists emphasized on policy of discretion as long as hard currency consumer crediting is concerned to avoid financial collapses in future.

In summer when business slows down and the body pines for the beach relaxation, hard currency rush is much likely to exhaust, realty will keep falling down and stock will keep still. To gain momentum for the autumn rally, hey?!


See also:

Мысли среди недели:путь к спасению мировой экономики

Последние события на мировых фондовых рынках заставили задуматься, как близко мы стоим к краю мировой экономической пропасти. События 11 марта 2011 года, 4 августа 2011 уверенно указывают на то, что депрессивное десятилетия начала третьего тысячелетия будет иметь еще более депрессивное продолжение. Движется ли мир в хорошем направлении во всех смыслах слова «добрый»? Может долго держаться макияж, если наносить один слой пудры за другим?

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