Gross domestic product and its place in the state’s economic growth

Victoria Kovalenko
Doctor of Economics, Professor of Banking Department, Odessa National Economic University, Ukraine, e-mail: kovalenko-6868@ukr.net, ORCID ID: https://orcid.org/0000-0003-2783-186X

Cite this article:

Kovalenko, V. (2020). Gross domestic product and its place in the state’s economic growth [Valovyi vnutrishnii produkt ta yoho mistse v ekonomichnomu zrostanni derzhavy], Socio-economic research bulletin, Vìsnik socìal’no-ekonomìčnih doslìdžen’ (ISSN 2313-4569), Odessa National Economic University, Odessa, No. 3-4 (74-75), pp. 58–72.

Abstract

The article analyzes the dynamics of changes in gross domestic product of Ukraine and other countries of the world during 1991–2019. The role of gross domestic product in the country’s economic growth is determined. The current level of gross domestic product of Ukraine in comparison with other countries has been defined. Gross domestic product indicator by purchasing power parity per capita (real gross domestic product) was used for comparative analyses. Attention is focused on the fact that both in Ukraine and in a number of European countries there is a positive trend regarding its growth. It is established that the functioning of the shadow economy, along with the legal one, leads to a significant reduction in the share of tax revenues in the structure of the country’s budget revenues, which endangers the implementation of important government programs. Assessment of gross domestic product by categories of final consumption and income has been carried out. It has been proven that the main burden of losses from the economic downturn is shifted to employees. A decrease in gross domestic product leads to a reduction in the share of wages. The dynamics of indicators of the ratio of internal and external debt to gross domestic product for the period 2006–2019 is analyzed. It is established that the peak period, which poses a threat to Ukraine’s ability to fulfill its obligations, falls on 2015–2017. It has been substantiated that the growth of real gross domestic product in Ukraine is insignificant. External and internal reasons for the slow growth of real gross domestic product are determined, in particular: a high level of corruption; war in the East; growth of inflation, NBU discount rate; low investment attractiveness of domestic enterprises; growth of external debt; deterioration of transport infrastructure; poor economic dynamics; lack of a country development strategy. The directions of solving the negative situation that has developed in the country are given, and the ways of increasing the growth rate of the gross domestic product are proposed.

Keywords

nominal GDP; real GDP; GDP at purchasing power parity; GDP per capita; economic growth.

JEL classification: Е100; E520; O400; DOI: https://doi.org/10.33987/vsed.3-4(74-75).2020.58-72

UD classification: 330.55:303.7336.71

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

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