Oleksandr Melnychenko

Department of Finance, Gdansk University of Technology,

Poland

oleksandr.melnychenko@pg.edu.pl

ORCID 0000-0002-7707-7888

Consequences of russia’s military invasion of Ukraine for Polish-Ukrainian trade relations

Tetiana Osadcha

Department of Accounting and Taxation, 

Odesa Mechnikov National University,

Ukraine

tatiana@osadcha.com

ORCID 0000-0003-4258-0907

Anatoliy Kovalyov

Odessa National Economic University,

Ukraine

kovalovanatolij552@gmail.com

ORCID 0000-0002-6128-7012

Valerii Matskul

Department of Mathematical Methods of Economic Analysis, 

Odessa National Economic University,

Ukraine

valerii.matskul@gmail.com

ORCID 0000-0003-3897-5500

Abstract. An accurate forecast of interstate trade volume allows for short-term and long-term planning, particularly deciding on state budget revenues, foreign exchange earnings, border arrangement, other infrastructure, migration and social policies. Hostilities are destructive so the russian military aggression against Ukraine in 2022 needs to be assessed in terms of its effects on key economic aspects of Polish-Ukrainian relations, as Poland has been the main economic, trade and social partner of Ukraine in recent years. This article analyses the trade dynamics between the two countries since 2005. It was found that since 2015 the main trends of this dynamics have changed. Monthly data from 2015 to 2021 were used for modelling and forecasting. Relevant SARIMA and Holt-Winters exponential smoothing models were built. These models forecast the volume of trade for the fourth quarter of 2021 and the first quarter of 2022. The relative errors of forecasting (compared to actual data) for October, November and December 2021 were as follows: according to the SARIMA model – 0.8%, 3.6% and 2.3%, respectively; for the Holt-Winters model – 1.9%, 3.6% and 0.7%, respectively. Given the expectations and consequences of russia’s military aggression against Ukraine, the average projected trade turnover between Ukraine and Poland was reduced by 20% per month for the first quarter of 2022. In comparison with the available actual (preliminary) data for January 2022, such a pessimistic forecast gave the following relative forecasting errors: according to the SARIMA model – 3.8%; according to the Holt-Winters model – approx. 1%.

Received: March, 2022

1st Revision: September, 2022

Accepted: December, 2022

DOI: 10.14254/2071-8330.2022/15-4/8

JEL Classification: H56, F17, P33

Keywords: trade, Poland, Ukraine, russian military aggression, time series, forecasting