Analysis of the impact of international financial organizations on the economic growth of the country

Abstract

ANALYSIS OF THE IMPACT OF INTERNATIONAL FINANCIAL ORGANIZATIONS ON THE ECONOMIC GROWTH OF THE COUNTRY The article analyzes the economic cooperation of Ukraine with International Financial Organizations at different stages of development. It has been determined that for the whole period of Ukraine's cooperation with the MFIs, loans for the total amount of USD 12 579 million and EUR 5 923 million were attracted for the implementation of economic and social development projects. Of all international financial institutions, the largest amounts of loans to the Ukrainian economy were provided by the International Monetary Fund USD 23.668 billion, which is 69% of the total amount of international loans received. In the second position the volume of loans granted by the International Bank for Reconstruction and Development (12.6%), the volume of loans from the EBRD amounted to USD 157.79; loans granted by the European Investment Bank account for 11.9%. It is determined that, based on the purpose of borrowing by MFIs, their practical use and repayment conditions, there are consequences for their use in the future. In Ukraine, new external borrowings are directed not at economic development but at financing current budget expenditures, including the servicing of already existing external debt. As a result of the analysis it is determined that most EU countries have significantly exceeded the generally accepted debt load limits. In particular, Greece's gross national debt is 181.13% of GDP, Italy 132.16%, Portugal 121.47%, Cyprus 102.54%, Belgium 102.03%. The ratio of gross external debt to GDP is 85.74% in Ukraine. It is noted that a high number of EU countries with debt levels above the average level of integration (58%) are characterized by low GDP growth rates. On the contrary, in countries where the level of government debt does not exceed 50% (Estonia, Luxembourg, Bulgaria, Czech Republic, Denmark, etc.) higher values of GDP growth are observed. It is noted that government borrowing can be characterized by such a positive macroeconomic effect as accelerating the growth of national income with condition if borrowing money used effectively. However, in practice, attracting external borrowing to the economy, in particular by MFIs, has a positive economic impact mainly in the short term, with negative effects in the long term. In the article has been identified the patterns and dependencies between rates of economic development of EU and Ukrainian countries with changes in the level of government borrowing. Also has been determined the maximum value of the level of government debt, the achievement of which causes a slowdown in the country's economic growth rate. The implications and problems of using external borrowing are revealed. Measures are outlined to improve economic cooperation with international financial institutions.