The National Bank of Ukraine admitted that by the end of the year, Ukraine’s GDP will fall by a third, and recovery will begin in the second quarter of 2023.
This is stated in the message of the regulator on the state and prospects of the economy in Ukraine.
Consumer inflation in June exceeded the NBU’s target of 5% ± 1% by 16.5% and accelerated much faster than the central bank expected in its previous forecasts.
Inflationary tendencies in Ukraine, first of all, were determined by the consequences of military actions, as well as by high world prices for energy resources.
In 2022, the NBU predicts that the inflation rate will exceed 30%. Next year, the economy is expected to return to growth, and inflationary dynamics – to decline.
In the quarterly inflation report, the National Bank assumes that inflation will accelerate until the end of this year and will begin to decline only in the first quarter of 2023.
The reason for the price shock is the consequences of hostilities and the high cost of energy.
In 2023, an improvement in inflation expectations, the debugging of logistics and a gradual increase in yields may lead to a slowdown in inflation. The corresponding monetary policy of the NBU and the reduction of global inflation can also help to contain the rise in prices.
The high price of energy carriers and the reduction of tariffs for the population to market levels will negatively affect the rise in prices.
Consumer inflation will slow down to a single-digit level only at the end of 2024, the NBU assumes. In 2023, it will only drop to 20%.
If the security situation in Ukraine continues to be uncertain, then economic activity in 2023 will be subdued – GDP will grow by only 2%, and a full recovery will not begin until 2024. Access to the Black Sea ports and the associated positive effects for agriculture can improve the situation.
Source: Racurs
