Ukraine’s GDP will decrease by a third this year – NBU

As a result of the war, Ukraine’s real gross domestic product will decrease by at least a third in 2022, the National Bank predicts.

GDP is expected to shrink in all parts. In particular, private consumption will decrease, due to the forced departure of citizens from the country, increasing unemployment, lower incomes and savings on insignificant expenses. Due to the large uncertainty and high risk, investment activity will also be significantly reduced.

The central bank said the decline in consumption and investment could lead to a decline in imports. However, the export of goods also suffered huge losses due to the closure of businesses, decline in sown areas and the impossibility of effective agricultural work due to conflicts, blockage of ports, and problems. in the supply of fuel and fertilizers.

At the same time, stocks of products are expected to increase, which businesses will try to export later.

“The final assessment of economic losses from Russia’s invasion of Ukraine will largely depend on the duration of the conflict. The key to Ukraine’s rapid recovery will be more structural reforms, attraction of large -scale international support. and integration into the European Union, ”the report said.

Now, for the second time since the beginning of the war, the NBU keeps the discount rate at 10%.

According to the Ministry of Economy, in the first quarter of 2022, Ukraine’s GDP dropped by 16% compared to the same period last year.

Analysts predict a decline of up to 50% of Ukraine’s GDP due to the war.