It is also expected that after a rapid decline in 2023, annual inflation will decrease to 7.6% in 2025.
The European Commission improved its forecast for Ukraine’s gross domestic product (GDP) growth in 2023 from 0.6% to 4.8%. The forecast for 2024 has been reduced from 4.0% to 3.7%.
By 2025, GDP growth is expected to be 6.1%.
The EC emphasized that despite the serious challenges caused by the war of Russian aggression, the economy of Ukraine showed great stability in 2023 thanks to exceptional yields, government incentives supported by solid support from with international partners, and the government’s commitment to ensuring macro-financial stability.
Growth is expected to reach 3.7% in 2024 and 6.1% in 2025, with private consumption and public investment being the main growth drivers. Until the end of the forecast horizon, real GDP will remain approximately 20% below prewar levels.
After an early decline in 2023, annual inflation is expected to ease to 7.6% in 2025, supported by the easing of production restrictions and tight monetary policy.
The budget deficit will remain high in 2024 due to high defense spending. However, higher nominal GDP growth should boost revenues in 2025 and help reduce the deficit. Government debt is expected to continue to rise over the forecast horizon. By 2025, public debt will rise to just below 100% of GDP.
We remind you that the International Monetary Fund raised the economic forecast for Ukraine’s GDP growth from 2 to 4.5% by the end of this year. At the same time, last month the IMF predicted the growth of Ukraine’s GDP at 2%, and in statements at the management level of the fund there are even estimates of 1%.
According to the Ministry of Economy, at the end of September, Ukraine’s GDP growth was about 9.1% compared to the same period last year. As a result, for January-September 2023, growth is estimated at 5.3%.
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Source: korrespondent
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.