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Expert: industry should grow 8-10% for GDP to grow 5-7%

The expert refuted the view that industry is the last century.

Expert: industry should grow 8-10% for GDP to grow 5-7%
Photo: Photo: Max Levin

For the Ukrainian economy to grow 5-7% a year, the industry should show the growth of 8-10%, Deputy Director of Ukrpromzovnishexpertyza Serghiy Povazhnyuk told a round table conference organised and hosted by Gorshenin Institute on 24 March.

"Nowadays, there is an opinion that industry is something belonging the 19th century, and we need to develop the service sector instead - IT, transport, etc. But if we look at the share and place of the processing industry in the economy of developed countries, we will see that, for example, in Germany the per capita added value is more than 7,500 dollars against 350 in Ukraine. Even in China, with a billion residents, the added value generated in the processing industry is several times higher," Povazhnyuk said.

He noted that Poland has doubled the size of its GDP in just 20 years as Polish processing industry soared 3.5 times. The situation is similar in Slovakia, which, the expert said, is called "a small China in Europe."

"That is, if we want our GDP to grow by 5-7% a year, our processing industry should grow at least 8-10%," he stressed.

As an example, he cited the situation with the production of nitrogen fertilizers that Ukraine imports despite having sufficient capacities to provide them for the agrarian sector.

"The available capacities can generate up to 8 million tons, including, of course, Horlivka Stirol located in the occupied territory. Even without this plant, the capacity of domestic producers of nitrogen fertilizers is about 6.5 million tons, which is absolutely sufficient to meet the needs of farmers," said Povazhnyuk.

The production of a ton of grain today costs 100 dollars in seeds, fertilizers, pesticides, depreciation, etc, the expert reminded, of which $ 70 is currently spent on imports.

"That is, we export a ton of grain for 150 dollars and buy imports worth 70 dollars," Povazhnyuk stressed.