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investment.
Off the books transactions account for half of Ukraine’s GDP, Danylo Hetmantsev, estimated the Chairman of the Rada’s Committee on Finance, Tax and Customs Policy, in an interview with Ukrinform, the state-owned news agency. “I believe that the size of the shadow economy is half of GDP,” he said. The exact figure no one can say, no research can be reliable, because the ‘shadow’ cannot be counted.”
3.2 Macro outlook
The National Bank of Ukraine downgraded its forecast for real GDP growth in 2021 to 3.8%, from 4.2%. “The introduction of new quarantine restrictions has led to the suppression of business activity,” the bank said. “The effect of last year's low harvests affected the indicators of agriculture, food processing and cargo turnover.” After a 2.8% drop during January-February, growth should return in the current second quarter, the bank predicts. The World Bank also predicts 2021 GDP growth of 3.8%.
The IMF has updated its World Economic Outlook database in which it forecasts Ukraine’s real GDP will increase 4.0% in 2021 and about 3.4% in the next two years. In this way, the fund sees Ukraine’s economy will grow slower than the global one (6.0% in 2021 and 4.4% in 2022, based on IMF estimates) and slightly below the euro area (4.4% in 2021 and 3.8% in 2022).
The IMF expects Ukraine’s nominal GDP will reach UAH4,606bn ($165bn) in 2021, or 12.6% higher y/y. It expects Ukraine’s CPI will increase to 7.2% by end-2021 (from 5.0% as of end-2020) and will gradually slow down to 5.0% by 2024. The fund also expects that Ukraine’s current account balance will switch from a $6.6bn surplus last year to $4.2bn deficit in 2021 (numbers comparable to those observed in 2018-2019). It expects Ukraine’s debt to GDP ratio will
18 UKRAINE Country Report May 2021 www.intellinews.com