Factors of Economic Growth: Search for Priorities for Ukraine

Introduction. The problem of economic growth never loses its relevance. At present, advanced countries are concerned about the slowdown in the pace of economic growth, the acquisition of new normal. For developing countries, the search for growth factors that would accelerate development and bridge the existing gaps has traditionally been a priority. Purpose. The purpose of the article is to analyze a wide range of determinants of economic growth, to select from among them the priority ones and to correlate them with the domestic realities. Results. The study has identified the main sources of growth as opposed to others, which, while very important, nevertheless limit their importance to the creation of conditions for sustainable economic growth (particularly with regard to institutions and policies). Different strategies of Ukraine’s economic growth in the period of 2000–2007 are presented and the primary impact on the dynamics of GDP investments is proved. The extremely low level of gross private domestic investment (which never exceeded 28% of GDP and collapsed to 13.4% in 2014) makes it impossible to draw parallels to countries that demonstrate rates of economic miracle. The insufficient amount of gross fixed capital formation is also evidenced by its comparison with the degree of depreciation of fixed assets. The task of strengthening investment activity is significantly complicated by a number of circumstances, of which the article presents the tight monetary policy of the National Bank of Ukraine and the growing migration of highly skilled professionals. Conclusions. The need to accelerate economic growth requires a significant increase in investment spending. Because of their unique macroeconomic role, investments provide for overall economic growth, both through direct impact on the real sector and by addressing a multitude of other challenges. For example, a high level of investment will not only increase employment and incomes, but can also reduce the inflationary potential of the national economy, slow down the exodus of specialists from the country, and diversify (towards complications) domestic exports