The effect of the covid-19 pandemic and quarantine restrictions on business and socio-economic dynamics in Ukraine

Abstract

The goal of the present article is to provide a comprehensive study of the effect of the COVID-19 pandemic and quarantine restrictions on the business development and socio-economic dynamics in Ukraine. The key hypotheses of the research: 1) the COVID-19 pandemic and quarantine restrictions reduce the pace of macroeconomic development in Ukraine, this being manifested in the decrease in GDP, the scope of export-import operations as well as decline in industrial production; 2) reduced pace of macroeconomic development causes: 2.1) reduced economic mobility of economic entities; 2.2) negative social consequences manifested in reduced real income of residents, unemployment growth. The effect of specific factors of macroeconomic development and economic mobility of business entities on the unemployment rate increase in Ukraine has been shown through the correlation and regression analysis. Findings: Quarantine restrictions applied for the sake of slowing down the speed of the pandemic spread have acted as a factor causing decrease in GDP, scope of export-import operations as well as decline in the industrial production in Ukraine. It has been established that reduction of the pace of macroeconomic development in the background of unprecedented restrictive measures has caused economic imbalances in the country, manifested in inflation fluctuations and increase in the prices of foodstuffs and industrial goods, reduced business activity of business entities, decline in the commodity turnover volume, reduced business profitability. It is stressed that in the conditions of poor control over the processes of disease spread and uncertainty in the timeline of the pandemic the efficiency of the business activity stimulation in Ukraine can be ensured via consideration of the effects of behavioural economics as well as direction of the limited financial resources into the fields of the country’s economy that can ensure its smart specialization and/or are building their capacity even under pandemic conditions.