The gradual approximation of the regulatory environment and digital development of Ukraine to the level of the European Union as part of integration into the EU Digital Single Market will affect the productivity and economic growth of the country, according to a Tuesday statement on the website of the Ministry of Digital Transformation.
The study entitled “Ukraine’s integration into the EU Digital Single Market: potential economic benefits” was carried out by the Trade+ Center for International Trade Analysis at the Kyiv School of Economics and NGO Ukrainian Center for European Policy and was ordered by the Ministry of Digital Transformation.
The results of the study contain expert assessments and real calculations of the potential profit for the country’s economy from integration into the EU Digital Single Market.
According to the study, the gradual approximation of the regulatory environment and digital development of Ukraine to the EU level within the framework of integration into the EU Digital Single Market will influence bilateral trade: an increase in exports of goods from Ukraine to the EU is expected by 11.8%-17% ($2.4-3.4 billion), services – by 7.6%-12.2% ($302.5-485.5 million).
It will also impact the productivity and economic growth of Ukraine: GDP growth in Ukraine is expected at the level of 2.4-12.1% ($3.1-15.8 billion), the welfare of citizens – by 3.6-7.8%.
It is also expected that the export of goods from the EU to Ukraine will grow by 17.7-21.7% ($4.1-5 billion), and services by 5.7-9.1% to ($191-305 million).
According to the study, an increase in the level of digitalization by 1% will lead to an increase in Ukraine’s GDP by 0.42%.
“Various scenarios of integration into the EU Digital Single Market show that the size of potential benefits will depend on the scale of regulatory and digital transformations in Ukraine. The faster and more efficiently we implement the necessary transformations, the faster we will be able to realize the benefits of integration into the EU Digital Single Market,” Deputy Minister of Digital Transformation for European Integration Valeria Ionan said.
According to the study, the main economic benefits for Ukraine from integration into the EU Digital Single Market are: reduction of transaction and trade costs in trade in goods and services between the EU and Ukraine; growth of business efficiency, economic productivity and GDP of Ukraine; growing well-being of citizens of Ukraine and the EU: better access and lower prices for digital innovative goods and services, consumer protection; development of innovative products and services of digital infrastructure.
In addition, bringing Ukraine’s legislation and standards closer to EU legislation and standards will reduce regulatory differences between Ukraine and the EU in the digital sphere and accelerate Ukraine’s digital development.