Will the cashback programme for Ukrainian goods help the economy and where to get money for it

In theory, cashback can indeed increase tax revenues, stimulate import substitution, and thus improve the balance of payments situation, reducing pressure on the hryvnia and foreign exchange reserves.

The main question is who will pay for the cashback for Ukrainians. If it is budget funds, it is not clear where they will come from.

Covering additional budget needs by printing money will mean an increase in the money supply, which will accelerate inflation. In addition, the additional demand for domestic production, given the limited supply, will further accelerate price growth.

This negative effect will be greater than the positive effect of the programme itself.

Origin: Forbes.