Page 17 - UKRRptApr20

economy can work from the third quarter, then the reduction in global GDP will be 1-2%. This is more than it was in 2009. In Ukraine, GDP will decline by 4%," Fiala said on the Freedom of Speech TV program on March 20.
This scenario involves the devaluation of the hryvnia to UAH30/$1 with inflation being 5%, as well as a sufficiently large increase in unemployment and a drop in budget revenues, he added.
"If quarantine extended until June-July and it cannot be stopped or relaxed, we expect the [Ukrainian] economy will fall by 9%. The exchange rate will be UAH35/$1, inflation will increase," Fiala said.
The government, first of all, should meet the conditions of cooperation with the International Monetary Fund (IMF), he said.
"This means the adoption of two bills. We hope that at the beginning of next week the parliament will meet and these two bills will be voted," the head of Dragon Capital said.
The two main preliminary measures for concluding a new program with the IMF are the adoption of a law on the land market and amendments to the law on banks, which makes it impossible to harm public finances by the former owners of the banks, which the National Bank once removed from the market.
US investment bank JP Morgan cut its GDP growth forecast for Ukraine from 3.6% made at the start of this year to -2.6% ​if Kyiv closes a new Extended Fund Facility (EFF) deal with the International Monetary Fund (IMF), the Kyiv Post reported on April 1.
The economy will contract in the first half of the year, but the pain will be limited to the first half and in the second the economy will recover somewhat.
The bank also predicts that Ukraine’s state budget deficit will increase from 2% to 4.7% of GDP this year, and nominal GDP will reach UAH4 trillion ($142.9bn) by the end of the year, which is almost $18bn less than expected, reports the Kyiv Post.
Ukrainian Prime Minister Denys Shmygal said the government is expecting a contraction of 4.8% in 2020 ​and the Ukrainian economy won’t be able to survive a long-term quarantine.
“Ukraine is not a rich country that can afford to spend half of the year not working and watching TV on the couch,” Shmygal said on March 30 during a talk show on the ICTV channel, as cited by the Kyiv Post.
Ukraine’s Economy Ministry published a revised outlook at the end of March that predicts a GDP contraction of 3.9% for this year​, unemployment of 9.4%, up from the previous forecast of 8.1%, and a contraction of 0.3% for real wages. The outlook for the hryvnia dollar exchange rate was cut to UAH29.5 for this year, which is UAH2.5 less than had been previously forecast. Inflation will accelerate to 8.7%, compared to the expected 5.5%, the ministry predicted.
However, the situation will get significantly worse if the lockdown is extended beyond a few months in spring​. Then Ukraine’s GDP could contract by as much as 9% and the hryvnia might depreciate to UAH35 per dollar, according to a joint statement of the Union of Ukrainian Entrepreneurs, the European Business Association and other business associations.
Ukraine’s economy ministry downgraded its growth forecast for 2020 to a 3.9% y/y decline from 3.7% y/y growth at the end of March. ​The updated forecast assumes consumer inflation of 8.7% y/y (vs. 5.5% y/y previously), and
17​ UKRAINE Country Report​ April 2018 ​ ​www.intellinews.com