DIGITAL EFFECTS ON MACROECONOMIC STABILITY IN THE FRAMEWORK OF COVID-19 PANDEMIC: EU PRACTICE *

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.

Formulation of the problem.Today's trends show a significant impact of the COVID-19 on all spheres of country's socio-economic development.The processes of the global pandemic contributed to the intensification of digitalization of economy's sectors.Under these conditions, the volume of transactions in the field of e-business has increased that affected the development of both national and global economies.
The effects of the pandemic and the accompanying quarantine measures resulted in changes in lifestyle of the society, which ultimately affected the indicators of country's socio-economic development, including indicators of its macroeconomic stability and gross domestic product as the key one among them.
Analysis of recent research and publications.Investigations on the Covid-19 pandemic issues and its effects on the indicators of macroeconomic development, in particular within economic sectors, are gaining global popularity today among scientists and practicing financiers, entrepreneurs who already have active business or those who is at the stage of implementation the start-up.
The peculiarities of macroeconomic development, business digitalization and innovative digital trends for economic activity during the COVID-19 were covered in researches on economic, financial and social topics [1,2,3,4,5,6].In particular, in our previous studies, the interrelation between the country's growth indicators, on the one hand, and crisis phenomena, levers of destabilization, on the other hand, was substantiated [7, 8,9,10,11].
Depending on the rates of economic, financial, social development of countries, each country has been more or less affected by the pandemic on its growth indicators.In order to improve visibility and objective research, it becomes necessary to conduct сross country analysis of the degree of impact of factors on the resulting indicator of economic growth -gross domestic product.
The purpose of the paper is to assess the sensitivity of GDP as the main indicator of socioeconomic development of both European Union (EU) and Non-EU countries to the instance of imbalances in the economy (the case of the COVID-19 pandemic) and substantiate the role of digitalization in providing the country's economic growth.
Research results.Nowadays among the main trends in the development of informatization of society, which applies to almost all spheres of life, including economics, public administration, science, art, it should be noted the intensive spread of digital processes, in particular rapid development of the Internet.Industries directly related to information and telecommunications technologies are growing faster than traditional industries and are gaining dominance.Such branches of economy as communication, mass media, consulting services, etc. gradually and organically flow into the sphere of the Internet.
Today, online transactions within digital platforms become increasingly important.Its development is so rapid that most of the world's largest companies, along with the traditional offline are beginning online business.
E-business is developing rapidly in the world, due to both the improvement of technical conditions and the peculiarities of consumer behavior.The COVID-19 pandemic further emphasized the role and importance of ICTs, intensifying the volume and scale of financial transactions online.Talking within global merits more than 205 countries are affected currently with the influence of COVID-19 [1,2,5].The COVID-19 pandemic effects much the development of all areas, but it is especially important for the e-commerce activity, as this area allows ensure all necessary requirements of current coexistence, ensuring social distance.Ecommerce allows many businesses to operate in new conditions and expand the geography of its activity.
The downside of the pandemic medal considers its negative impact on the economic growth of the EU countries as well as Non-EU countries (Figure 1).As a result of the significant impact of the pandemic and the quarantine measures that accompanied it on the life of society, the following processes have become typical for all countries: dramatic falling of foreign direct investments; declining of cross-country trade volumes, in particular its export and import volumes; global manufacturing output decreasing; rising unemployment, reductions in working time, temporary layoffs and job-search discouragement [6].The Figure 1 demonstrates that crisis situation caused by pandemic condition effects world economy even deeper than during the crisis in 2009 year.A Coronavirus crisis affects dramatically economies of EU countries as well as Non-EU countries.At the range of analyzed countries the worst results in 2020 year have Italy and Mexico -real GDP decreases here on 8,9 % and on 8, 2 % relatively.But according to forecast the situation will change for better and the rate of GDP growth in all analyzed countries will be positive.
Thus, the influence of Covid-19 pandemic has shifted the emphasis, role and importance of key indicators of GDP as the main macroeconomic indicator of country's economic development.In such conditions, there is a need to determine the degree of impact of key levers on GDP for EU countries and Non-EU countries.
It should be emphasized that the choice of factors that determine the GDP considering digital signs of current economic process is a difficult challenge.All traditional factors of GDP (macroeconomic indicators), except e-business and e-commerce transactions, are characterized by traditional measurement indicators.Due to the impossibility of accurately determining the volume of e-commerce and imperfect mechanisms of legal regulation this type of commerce, in particular its tax accruals and deductions, it is necessary to choose the indicator that reflects digital progress of the country and could be assessed.To our mind, the indicator that meets these criteria is IMD World Digital Competitiveness rate.It characterizes digital advantages of the country for digitally based economic activity.Moreover, IMD World Digital Competitiveness rate represents opportunities and capabilities for the implementation of online forms of business at the macro level of the country.Thus, the factors of this index -technology, future readiness and knowledge -are relevant with characteristics of ecommerce as a form (component) of e-business.The factor "Technology" characterizes the ICT coverage of relevant economic entities.Factor «Knowledge" -characterizes the ability to use modern digital technologies, in particular the ability to work in online platforms while carrying out e-commerce.Factor "Future readiness" defines the forms and vectors for the implementation of the business model in the Internet environment (Table 1).
At the same time, for Ukraine, like many other non-EU countries, the active digitalization of all sectors of the economy and not only caused by COVID -19 has become a certain kind of challenge.
Active role of digitalization processes and growth of online business during the pandemic period creates a need to make an observe on the IMD World digital competitiveness ranking 2020 (within its components -Knowledge, Technology and Future Readiness) in comparison with countries, which were taking into account in the analysis of the GDP level (Figure 2).
The position of Ukraine on the Figure 2 confirms the fact of low level of its digital competitiveness -thus, all three factors leave behind our country in a range of other analyzed countries in World rank.The worst positions of Ukraine in this ranking are followed by the factor Technology and Future readiness.

Figure 2. Countries ranking according to the factors of IMD World digital competitiveness ranking 2020
Source: created by the author based on the sources [12].Source: created by the author based on the sources [12].
In order to conduct a more in-depth analysis of Ukraine's position in terms of digital competitiveness compared to other countries, the factors, sub-factors and criteria defining IMD World digital competitiveness ranking are systematized in the Table 3 Therefore, as the factors of the proposal, which have a fundamental impact on the GDP, we can distinguish the following:  export activity;  import activity;  foreign direct investment;  inflation rate;  unemployment rate;  the size of national and external debt;  IMD World Digital Competitiveness rate;  population.Therefore, in order to predict and regulate the size of GDP for EU countries and Non-EU countries in the conditions of instability, in particular -due to the COVID-19 pandemic, there is a need to manage mentioned above factors and define the role of digital competitiveness plays in GDP growth nowadays.
In order to specify the relationship between the GDP and the factors of its growth the method of Pairwise correlations of variables was carried out.The empirical estimates consider using World Bank Data for the period from 2013 till 2019 year.Factor model of GDP dependence on its growth indicators for Ukraine is presented in Table 2.

Table 2 Factor model of GDP dependence on its growth indicators for Ukraine
Source: created by the author based on the sources [11].
The results of the performed correlation analysis show that countries such as Ukraine, Mexico, Chile are characterized by a significant positive relationship between the IMD World Digital Competitiveness rate and GDP growth (respectively -0.74, 0.6, 0.72), while Poland, Germany, Italy (respectively -0.20, 0.24, 0.32) -are characterized by an insignificant relationship between the level of digitalization of the country and the growth of its GDP.
Such results can be explained by the fact that the level of digitalization in the EU countries was higher even before the emergence of COVID-19digital forms of doing business have been practiced for a long time and are being successfully implemented -therefore, the business entities were readier to practice online methods in work during quarantine period accompanied by COVID -19.
Conclusions.The unstable socio-economic situation in the countries of the world, which has developed over the last year as a result of the COVID-19 pandemic, is characterized by a global scale of coverage and the long-term nature of the impact on society and economic development.At the same time, the pandemic and the accompanying quarantine measures led to the intensification of digitalization processes and the active introduction of an online business.New models and forms of doing business, redistribution of consumer interests, and consequently the active development of some sectors of the economy and the decline of othersall this has led to a shift in emphasis on the role and leverage of gross domestic product as an indicator of socio-economic development.
The results of the investigation based on empirical estimates allowed to make following conclusions: there is a close inverse relationship between the size of GDP and such indicators as the export activities, FDI, general governmental gross debt and external debt; there is a slight inverse relationship between the GDP and inflation rate; there is little direct link between the amount of GDP and amount of population; there is a direct close relationship between amount of GDP and level of e-commerce, which we identify as ranking in IMD World Digital Competitiveness rank.

Figure 1 .
Figure 1.Dynamics of real GDP growth in the EU countries and Non-EU countriesSource: created by the author based on the sources[11] . Each group of factors can be subdivided into sub-factors and each subfactor is measured by relevant criteria.Thus, according to the report of IMD World Competitiveness Center about IMD World digital competitiveness ranking 2020 in terms of 63 countries Ukraine has the best positions among the countries according on the factor Knowledge, in particular its two sub-factors: Training & education sub factor (within the criteria -Total public expenditure on education and Pupilteacher ratio (tertiary education)) and Scientific concentration (within criteria Female researchers and R&D productivity by publication).The rating of Ukraine is completely opposite for two other factors -Technology and Future readiness.The country is characterized five criteria in which its performance is the worst compared to other countries.They are: Scientific research legislation and Intellectual property rights (within the subfactor Regulatory framework in Technology aspect), Mobile Broadband subscribers and Wireless broadband (within the Technological framework in Technology aspect), Cybersecurity (IT integration in Future Readiness).