Page 28 - Ukraine OUTLOOK 2024

The build-up of external trade credit, which, in large part, represents capital flight and was significant in 2022, has subsided due to additional capital controls and is no longer a major concern.
ICU estimates Ukraine will need $28-30bn in external financial aid to be able to cover gaps in external accounts (but this amount is definitely not enough to cover the budget deficit).
Any additional inflow on top of $30bn would allow the NBU to further increase its reserves and take ambitious FX liberalisation steps.
4.0 Inflation & Monetary Policy
Inflation fell rapidly in the second half of 2023 and will stay in the range of 6-7% in 2024, according to ICU, at least until summer before picking up somewhat by the end of the year. NBU’s monetary policy easing cycle is almost done, but symbolic cuts are possible in 2H24 if inflation and FX market risks remain balanced.
Dragon Capital says inflation for the end of 2023 will be 6.0% y/y due to a stronger-than-expected decline in fundamental pressures and increased forecasts for certain crop harvests. In 2024, inflation is predicted to accelerate to 8.0%, primarily due to higher domestic agricultural prices resulting from the partial recovery of Black Sea ports.
The most important thing for monetary policy is the forecast of consumer inflation, which predicted an average annual inflation of 20.3% in 2023, i.e. the same as that recorded in 2022 (20.2%). However, inflation in the second half of 2023 fell much faster than anticipated.
28 UKRAINE OUTLOOK 2024 www.intellinews.com