The fall of the Ukrainian economy in the war year may be slightly lower than previously expected.
The National Bank improved its estimate of Ukraine’s GDP decline in 2022 to 32% from 37.5%, the regulator’s press service reported on Thursday, October 20.
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“Economic activity in the second and third quarters of 2022 gradually recovered due to the further liberation of Ukrainian lands, the adaptation of enterprises to new conditions and the operation of the grain corridor. The latter factor is led to a positive contribution to GDP compared to the July Forecast… The National Bank has slightly improved the estimate of the fall in GDP in the current year to about 32%,” the report said.
At the same time, many factors prevent economic recovery: logistical problems, especially in metallurgy, the destruction of capacities, especially in the energy sector, and a decrease in the real income of the population, as well as the situation in agriculture, both due to a lower yield this year and a significant reduction in acreage.
“The weakening of security risks included in the forecast from mid-2023 will be a key factor in the future economic recovery. In particular, a full upgrade of the Black Sea ports will significantly increase exports of Ukrainian. Significant budget support will stimulate consumer demand and investment in the country’s recovery,” the central bank believes. .
At the same time, the loss of labor and production capacity, high world energy prices and significant import requirements will slow the economic recovery.
Under such conditions, according to the NBU, GDP growth rates in the coming years will be restrained – at the level of 4-5%.
It is expected that from next year the current account will return to the deficit, because, on the one hand, a high amount of international financial assistance is expected in 2023-2024, especially in the form of grants, along with the improvement in the situation of security. in the forecast will contribute to a further increase in exports, and the remittances of migrant workers will remain at least at the pre-war level, and on the other hand, the restoration of the country will require large volumes of imports.
The main assumption of the forecast is a significant reduction in security risks from mid-2023, while the main risk for economic development remains the longer duration of Russia’s war against Ukraine.
Remember, the Ministry of Economy reported that according to the results of the three quarters of this year, the fall in GDP in Ukraine is estimated at 30%.
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Source: korrespondent
I am Dylan Hudson, a dedicated and experienced journalist in the news industry. I have been working for Buna Times, as an author since 2018. My expertise lies in covering sports sections of the website and providing readers with reliable information on current sporting events.