Foreign trade: the usefulness of indicators of exports of goods and services for monitoring imbalances in the country's economy

Abstract

The article is devoted to the study of trends in international trade in Ukraine in 2014-2023 and the impact of the export of goods and services on the formation of external imbalances in the Ukrainian economy in comparison with economically developed European countries. The purpose of the study is to assess the export component in the indicators of external imbalances. Based on the information on exports of goods and services of the European Union and OECD countries, the article calculates the share of exports of goods and services from Ukraine and the EU in total exports of economically developed countries, its growth/decline rates for 2014-2023, and determines the variability of exports of goods and services using the variance indicator. The study was conducted using the European Commission's methodology set out in the Macroeconomic Imbalance Procedure (MIP), which is designed to improve coordination and supervision of the EU's macroeconomic policies in order to establish the degree to which various indicators critical to the economy meet thresholds. The article considers the impact of the Export Performance (EXP) indicator in terms of establishing external imbalances, taking into account that the indicator of the onset of a crisis is not the decrease in the absolute exports, but a long-term decline in its ratio to the total exports of goods and services of developed economies. It is determined that over the past decade, Ukraine has seen three stages of decline in exports of goods and services: after the annexation of Crimea and the outbreak of the war in Donbas (2014-2015); after the COVID-19 pandemic (2019-2020); after the full-scale invasion of Ukraine by Russian troops (since 2022). The analysis concludes that the Russian-Ukrainian war has led not only to a decrease in exports of goods and services from Ukraine in absolute terms, but also in its share compared to economically developed countries. In addition, these crises have also had a catastrophic impact on the volatility of exports of goods and services, which indicates a significant increase in the risks of doing business for Ukraine's external partners due to the unpredictable economic and political situation in our country.