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3.2 Macro outlook
The Cabinet of Ministers has said that a drop of Ukraine's GDP in 2020 could be up to 8% compared to 2019, according to the updated government action plan. "Ukraine is traditionally more vulnerable to economic shocks, and therefore could feel a more significant impact: GDP may fall by 4-8% compared with 2019," the government said in the document posted on its website.
The government now says Ukraine’s GDP could shrink by up to 8% this year. In mid-April, the Economy Ministry based the revised budget on a 4.8% drop. Previously the Economics Ministry predicted a 4.8% contraction. The National Bank of Ukraine forecasts a 6-7% drop. Last week, the IMF forecast an 8.2% drop. T
The government expects Ukraine’s economic rebound to start in July. “All these macro-forecasts roughly coincide: starting from the third quarter, we expect economic growth in Ukraine,” Prime Minister Shmyhal told reporters on June 11. “There are businesses that have suffered, but there are also businesses and manufacturers who are quite optimistic.” Promising an increase in government purchases and maintenance of the $4bn road construction program, he said: “Warming up the economy is one of the main tasks of the government for the current year.”
The IMF gave a bearish forecast for Ukraine’s economic performance this year: GDP shrinkage of 8.2% in 2020 and growth of only 1.1% next year. By contrast, the World Bank forecast yesterday that Ukraine’s economic contraction will less than that in 2020 -- 3.5%. For next year, the World Bank predicts that Ukraine’s economy will grow by 3%. Ukraine’s government predicts this year’s drop will be 5%.
The IMF forecast Ukraine's real GDP for 2023–2025 as part of the documents covering the new SBA. According to its experts, after the decline this year by 8.2% and the recovery in 2021 by 1.1% and in 2022 by 3%, in 2023 the growth of the Ukrainian economy will accelerate to 3.4%, in 2024 – to 3.8%, in 2025 – to 4%.
Inflation after the jump from 4.1% last year to 7.7% this year will decrease to 5.9% next year, to 5.2% in 2022 and 5.1% in 2023, then it will stabilize at 5%.
Since the beginning of this year, according to the National Bank, the average hryvnia.
27 UKRAINE Country Report July 2020 www.intellinews.com
