According to the banker, the launch of the printing press will eventually lead to a much greater drop in the standard of living than raising taxes.
Ukraine faces a choice in the economy – either launch the NBU printing press, triggering devaluation and inflation, or raise taxes.
This opinion was expressed by banker and economic expert Sergei Fursa.
“The choice between the printing press a machine that starts devaluation and inflation, and raising taxes is very indicative. It's like a visit to the dentist. Imagine that in the 1st grade you were asked. Do you want to go to the dentist and get your teeth fixed, or would it be better to go to the movies,” the expert gives an example.
He warns that the launch of the printing press will eventually lead to a much greater drop in living standards than raising taxes.
“And taxes are painful right now. It's a visit to the dentist. Nobody likes paying taxes. And nobody likes dentists. But why do they go to them? Because it will be worse if you don't go. That's why there are dentists. And that's why there are taxes. And that's why they always raise them during wars. If you don't, it will be much worse,” the financier explains.
He assumes that raising taxes will indeed lead to an increase in prices by a conditional 5%. But in the case of money emission, prices can rise much more.
“The last time that printing press worked at full capacity was in 2022. The hryvnia exchange rate had come a long way back then. And prices rose by much more than 5%. But yes, not right away,” Fursa notes.
In his opinion, the inflation that the National Bank's launch of the printing press will lead to is also a kind of tax. A tax on the poor.
“So if we launch the printing press instead of raising taxes, then we are effectively shifting the burden of financing the army onto the poorest part of the population. And if someone had arguments that VAT cannot be increased because pensioners will suffer, then pensioners will suffer the most from the devaluation and the inflation caused by this devaluation,” he warned.
Fursa emphasized that the frozen printing press is a guarantee of maintaining macro-financial stability.
“And where there is no macroeconomic stability, there is no successful business. Because without a foundation, it makes no difference what kind of windows you have planned for yourself. And a sign of maturity is the ability to make unpleasant decisions. The ability to choose between bad and very bad,” concluded Sergei Fursa.
Earlier, the head of the Verkhovna Rada Committee on Financial, Tax and Customs Policy, Danilo Getmantsev, warned that raising certain taxes is unavoidable. Otherwise, the situation with the payment of money to the military may escalate as early as the end of September.
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