Forecasting regional development of the agricultural sector in the context of economic instability

Abstract

The purpose of the study was to assess the impact of economic factors on the agricultural sector of the Dnipropetrovsk Oblast for the period 2021-2024, identify key trends and develop approaches to improving the economic stability of the region. Within the framework of the study, methods of regression analysis, econometric modelling, and scenario approach were applied to assess the dynamics of yield, the structure of acreage, investment activity, and the share of the agricultural sector in the gross regional product. The results of the study showed that the share of the agricultural sector in the gross regional product ranged from 7.5-8.76% during the analysed period. The highest rate of 8.76% was recorded in 2022 due to a 46% reduction in the total gross regional product compared to 2021. The volume of agricultural production decreased by 33.9% in 2022, but partially recovered in 2023, reaching UAH 32.5 billion. The regression analysis showed that an increase in the fuel price by 1 UAH/l reduces the wheat yield by 0.2 cwt/ha, and an increase in the inflation rate by 1% leads to a decrease in the yield by 0.3 cwt/ha. Scenario analysis showed possible consequences of changes in economic conditions: in a pessimistic scenario, wheat yields may fall to 36.08 cwt/ha by 2028. The significance of the results obtained lies in the possibility of using them to form strategies for the recovery and development of the agricultural sector in conditions of economic instability. It was proposed to focus on attracting foreign investment, diversifying crops and introducing energy-efficient technologies to increase the sustainability of the region. The results of the study also highlighted the importance of government support, which accounted for 25% of total investment in 2023, which contributed to a partial recovery in economic activity in the agricultural sector.