A smaller-than-expected energy deficit and slightly higher grain yields led to an upgrade in GDP growth forecasts.
The National Bank of Ukraine revised the main macroeconomic indicators for the current and subsequent years. This was reported on the regulator’s website on Thursday, October 31.
Thus, GDP growth at the end of 2024 will be 4% instead of 3.7% predicted in July, and at the end of 2025 – 4.3% against the previously expected 4.1%.
“A smaller than expected electricity deficit and slightly higher yield of early grain crops allowed the NBU to raise its forecast for real GDP growth in 2024 to 4%,” said report.
The regulator pegs the forecast for Ukrainian economic growth at 4.3-4.6% in 2025-2026. with significant financial incentives supported by large amounts of international funding.
Encouraging factors for the forecast are also an increase in household incomes, an increase in crop production output and stable external demand.
As the NBU notes, the continuation of economic growth in Ukraine has been negatively affected by Russian attacks on energy infrastructure, a resurgence of migration and a lack of labor resources.
The National Bank also changed the price growth forecast for 2024 and 2025 for the worse: by 1.2 and 0.3 percentage points (pp), respectively, to 9.7% and 6.9%. Only in 2026 will the inflation rate be brought to the target of 5%.
“In the coming months, price pressure will continue due to the additional influence of food supply factors, expanding budget expenditures, rising wages and increasing energy shortages during the heating season. As a result, the inflation will reach 9.7% by the end of 2024.” , – said the regulator.
At the same time, the NBU expects that inflation will begin to decline in the spring of 2025. This will be facilitated by a balanced monetary policy, weakening of external price pressure, an improvement in the situation in the energy sector and an increase in yields.
Let’s recall that for the nine months of 2024, Ukraine’s GDP growth is estimated at 4.5% compared to the same period last year. The said data is published by the Ministry of Economy.
At the same time, the IMF predicts that in 2024 the Ukrainian economy will grow by 3%, and in 2025 – only by 2.5%.
Source: korrespondent
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