Digital effects on macroeconomic stability in the framework of COVID-19 pandemic: EU practice

Abstract

The article deals with the investigation of the impact drivers on the gross domestic product as the main indicator of socio-economic development of the country in conditions of the COVID-19 pandemic. The subject of the research in the article is the indicators of macroeconomic stability of the EU and Non-UE countries. The purpose of the article is to assess interrelation between the GDP and destabilizing economic factors, for European Union and Non-EU countries, and – to define the role of digitalization in providing the country's economic growth. Tasks: to study the trends of indicators of macroeconomic stability of the country, to determine the role of digitalization in economic development, to conduct a comparative analysis of indicators of digitalization of the economy and macroeconomic stability of EU and Non-EU countries. General scientific used research methods: analysis - to analyze the main indicators of macroeconomic stability of countries and identify trends in their change under the influence of digitalization processes; methods of factor analysis - to find the factors that have the greatest impact on the indicators of macroeconomic stability of the country. The obtained results: the economic barriers affected by the pandemic were defined: dramatic falling of foreign direct investments; declining of cross-country trade volumes; global manufacturing output decreasing; unemployment rising, reductions in working time, temporary layoffs and job-search discouragement. Empirical estimations based on the correlation analysis allowed making the conclusions about: close inverse relationship between GDP, import, inflation rate; slight inverse relationship between GDP and FDI, unemployment rate, external debt, general governmental gross debt; little direct link between GDP and population, IMD World Digital Competitiveness rank.