Vasyl ROHOVY: "We Do Not Have Any Reasons to Switch On The Money Printing Machine" 

Q:The Ministry you are chairing should arm the government with predictions of economic development. What scenarios of situation development are being developed now? How do the optimistic and pessimistic predictions sound?

 A: Quite frankly, we are really developing a number of scenarios. But I am forced to mention that a wide range of circumstances will have an influence upon the situation's development and it is not an easy thing to predict. The point is that we are dealing with crisises like the Russian and Asian ones for the first time. That is why the mechanisms and tools to withstand the crisis were developed and mastered very quickly. The work has not been finished yet. We have sufficient grounds to speak of controlling basic economic processes and parameters. We have prevented a distructive fall on the consumers' market and in the basic economy sectors and spheres.

At the same time the situation in Russia has not stabilized yet. For instance, inflation predictions fluctuate between 130% and 500%. The purchasing power of Russian enterprises should be predicted using this data because Ukrainian manufacturers depend on them. It is also essential to determine how the access of Ukrainian sugar, alcohol and grain to the Russian market will be regulated. And the orders, in particular of defense enterprises, which depend on the stability of the Russian budget. This is one aspect.

The next question is about traditional markets and traditional items of Ukrainian export-metal, chemicals, mineral fertilizers. The world markets for these products are not the best today.

As to the inner factors which influence the predicted economy indexes, the hryvnia devaluation level belongs to them. On the one hand, devaluation creates more profitable conditions for exporters. And our anti-crisis measures are aimed toward minimizing the losses of domestic manufacturers. Consequently, the devaluation is an  adequate reaction to secure the competitiveness of Ukrainian products. With this purpose the government adopted decisions to cancel  barter limitations for external foreign, even though there were positive dynamics to barter share reduction in this sphere. It makes only 8%, but the situation has changed and we are forced to increase barter in order to keep Ukrainian products on the Russian market. To do so, indicative prices have been reconsidered and the system of contract registration  simplified.

Considering all the factors mentioned , as for the market situation, we predict a number of inflation scenarios. The Ministry made more precise amplified the basic macroeconomic indexes which were submitted to the Ministry of Finance for further work on the 1999 draft budget.

Q: If 130%-500% of inflation is expected in Russia, what will happen in Ukraine?

A:We hope that if all the anti-crisis measures work out, in particular the draft laws that we had submitted to Parliament for consideration, we would be able to gain control over the situation and expect 20% inflation.

Q: And what if they do not work?

A: It depends on how well the anti-crisis measures work.

Q: Are there any predictions, developed by the Economy Ministry, connected with money emission? Is this notion presently at work?

A: We do not develop any questions related to money emission. We consider that the program we introduced lies within the parameters we have predicted, and we do not have any reasons to switch on the money-printing machine.