The Ukrainian economy could see a stronger recovery if security risks were reduced more quickly, the memorandum said.
The International Monetary Fund predicts moderate economic growth in Ukraine in 2023 at 1.0%. This is stated in the memorandum materials of Ukraine with the IMF, published on the website of the Ministry of Finance on Thursday, December 22.
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Earlier, the IMF did not make forecasts for the next year in Ukraine because of the Russian invasion.
Today, the forecast for the fall in Ukraine’s GDP in 2022 has been improved to 33.0% compared to the 35.0% expected in October.
According to the baseline scenario, GDP growth will be 4.0% in 2024, 3.4% in 2025, 3.6% in 2026 and 3.0% in 2027.
“The slow recovery can be attributed to a lingering impact in the first quarter of next year due to damage to the energy infrastructure. Economic activity is expected to increase in the following quarters mainly through public spending, while the continuation of exports will only gradually (given the destruction of capacity and remaining logistics problems), and consumption growth will remain weak (mainly due to the decline in the purchasing power of the population),” the memorandum said.
The year-on-year inflation rate in Ukraine is expected to gradually decrease from 30% at the end of 2022 to around 22.5% at the end of 2023.
“(This) reflects the residual effects of supply disruptions and production capacity degradation amid lower global energy prices,” the memorandum said.
At the same time, the memorandum states that the economy may jump faster to the bottom if the security and infrastructure situation improves more dynamically than expected.
“The economy could see a stronger recovery if security risks are reduced faster than expected and the current energy and infrastructure problems are more dynamically addressed. Under these assumptions, growth of the economy in 2023 could grow to 3-4%,” the memorandum said
The outlook may improve further with faster return of migrants, as well as large-scale recovery efforts that accelerate recovery.
Earlier, the Ministry of Economy said that in November the decline of Ukraine’s GDP exceeded 40%. Overall, for the current year, the forecast for the economic decline worsened to 33.2%.
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Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.