Page 13 - Ukraine OUTLOOK 2024

2023 in the last months of the year as the economy appeared to bounce back more strongly than anticipated.
Ukraine’s government predicts 4.6% GDP growth in the 2024 budget after circa 5% in 2023.
The IMF’s baseline projection for real GDP growth in 2023 was revised up to 4.5% in December. Growth is expected to somewhat soften in 2024 to 3-4% as the war continues.
The EC significantly improved its forecast for Ukraine's 2023 GDP from 0.6% to 4.8% between January and December. The EU growth forecast is for GDP to reach 3.7% in 2024 and 6.1% in 2025, with private consumption and public investments as key growth drivers. After declining swiftly in 2023, annual inflation is projected to decrease to 7.6% in 2025, supported by an easing of constraints on production and a tight monetary policy.
ICU investment company predicts GDP growth of between 5.8% and 5% in 2024. It is also assumed that at the end of 2023 inflation will be 6.2%. Inflation is expected to remain at no more than 7% until at least the summer of next year and then to accelerate somewhat. The forecast for the end of the year is 10.1%. Ukraine is predicted to receive at least $28bn-$30bn in foreign aid – less than expected by many other observers. The hryvnia will devalue slightly next year, and by the end of the year, the exchange rate will be UAH40.7 to $1. Also, the National Bank’s reserves are forecasted to grow to $44bn.
Dragon Capital has raised its estimate of Ukraine’s economic growth in 2023 to 5.2%, above the official forecast. The company maintains its forecast for 2024, expecting real GDP to increase by 4%. Dragon Capital cut its previous GDP forecast for Ukraine in 2024 in half from 8% to 4% y/y in anticipation of another year of war, The New Voice of Ukraine reported on December 7. Dragon expects international partners to approve new financial support packages and provide about $40bn in direct budget financing in 2024 – enough to cover the projected budget deficit. Assuming sufficient international financial support, Dragon Capital anticipates that the NBU’s reserves will gradually grow and reach $45bn by the end of 2024.
Concorde Capital's forecast for Ukraine's GDP growth is 6% in 2023 – one of the highest of all forecasts – and no more than 3% in the future, according to Concorde Capital CEO Ihor Mazepa. He also noted a significant increase in the public sector instead of privatisation and continued pressure on business from the state. Economic growth is now driving consumer demand. In the next two to three years he predicts GDP growth of about 3% under the best-case scenario (primarily with maintained international support). "Firstly, with the war, we have already lost 15% of the industrial and 20% of our human potential, i.e. consumers and labour force. Secondly, capital investments [that accelerate] labour productivity growth, are scarce during the war," explained Mazepa.
13 UKRAINE OUTLOOK 2024 www.intellinews.com