It will take many years for Ukraine’s economy to return to pre-war levels. However, after almost 20 months of war, a sense of resilience and relative stability has emerged, increasing confidence among consumers and investors.
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The New York Times writes about this.
The publication indicates that Ukraine will have to face enormous problems ahead, including the expensive reconstruction of the country’s devastated cities, a government deficit that will grow as the war drags on, as well as a labor shortage due to forced refugees and mobilization.
The Ukrainian economy is adapting to the war, says Elena Bilan, chief economist at Dragon Capital.
She added that people have moved from “saving mode” to a situation where they “feel more relaxed and start spending more.”
The World Bank estimates that private consumption in Ukraine will grow by 5% after contracting in the quarter of last year.
Last week, the International Monetary Fund forecast the country’s GDP to grow 2% in 2023, slightly less optimistic than the World Bank’s forecast but significantly higher than its original forecast of a 3% decline.
The World Bank estimates Ukraine’s total exports will continue to decline this year before rising by 15 percent next year and 30 percent in 2025, a potential lifeline for the economy if the war drags on.
Ukraine’s economy is increasingly centered around the war. More than half of the government’s 2024 spending, approximately $46 billion, will go to defense.
Ukraine’s budget deficit next year will reach 21% of total output, Prime Minister Denis Shmigal said last week. He added that his government would need a $42 billion bailout to cover the shortfall.
Source: Racurs
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.