KYIV, Nov 4 – Yulia Svyrydenko, President Volodymyr Zelensky’s top economic advisor, Thursday was approved by lawmakers as the first deputy prime minister in charge of economy in a desperate attempt to reverse Ukraine’s economic downturn.

Svyrydenko, who will also hold the post of the economy minister, replaces Oleksiy Liubchenko, who has resigned earlier this week amid the country’s dismal economic performance.

Svyrydenko effectively becomes the country’s new economic tsar who will shape entirely the government’s economic policy in a bid to promote investments and to encourage faster economic expansion.

"The most important thing for which we have gathered here depends on a successful economic policy - the well-being of Ukrainians,” Svyrydenko said addressing Parliament. “At present, we have almost no incentives to produce products with high added value.”

Ukraine’s economy fell into recession in the second quarter showing one of the worst economic growth numbers in the world amid the government’s failure to encourage foreign investments, and due to relentless borrowing to support social payments.

As a result, Ukraine’s public debt rose almost 10% in the past seven months to $92.5 billion as of June 30, up from $84.2 billion as of November 30, 2020, according to the Finance Ministry.

The debt shot up a staggering 18% over the past 25 months since Zelensky had taken office, with the country effectively showing zero economic growth over the same period.

"We must stop simply consuming public funds, instead we should be making well-thought-out investments, taking into account the effect on the economy," Svyrydenko said.

The government’s massive borrowing increased inflation and forced the National Bank of Ukraine to raise interest rates repeatedly this year, which had been making loans more expensive and discouraging economic growth.

At its most recent meeting on Oct. 21, the NBU kept interest rates unchanged at 8.5%, while annual inflation increased to 11% in September, which compares with the NBU’s inflation target of 5%.

The NBU lowered its forecast of Ukraine’s economic growth to 3.1% on year in 2021, down from 3.8%, suggesting that major economic headwinds must be expected in the months ahead.

Ukraine will have to focus on developing complex machinery manufacturing, such as shipbuilding, to expand the sector to UAH 22 billion and to create 50,000 new jobs within the next three years, Svyrydenko said.

Other sectors of the economy that the government plans to focus include energy, IT, agriculture, and construction. (tl/ez)