Scenario modeling of the critical macroeconomic and sustainable development indicators of Ukraine

¹ Igor Sikorsky Kyiv Polytechnic Institute, Department of Economic Cybernetics, 03056 Kyiv, Ukraine
² Igor Sikorsky Kyiv Polytechnic Institute, ESC “World Data Center for Geoinformatics and Sustainable Development,” 03056 Kyiv, Ukraine

^* Corresponding author: mazhara.glib@lll.kpi.ua

Abstract

The assessment of the state of macroeconomic security as a crucial component of economic security in the context of sustainable development and the forecasting of key indicators are becoming more critical in light of the complicated circumstances that the functioning of the Ukrainian economy is currently experiencing as a result of the full-scale Russian invasion. Therefore, this study aims to build a relevant system dynamic model for assessing and forecasting the level of macroeconomic security in the medium term. A system of dynamic models of three key indicators (GDP growth rate, consumer price index, and unemployment rate) was built based on Romer’s model of economic growth with the author’s modifications, a kinetic model of the price level, and an author’s model of the dynamics of population groups. The model’s average error equals 3.25%, the maximum one is 10.927% for the inactive population in 2018. A potential forecast was made, primary and alternative scenario forecasts were developed, and the mathematical expectation of key indicators according to the scenarios was calculated. Meanwhile, none of the developed forecasts characterized the state of the level of macroeconomic security precisely as optimal, which led to the conclusion that there is an urgent need to implement a system of measures to increase macroeconomic security.