Page 26 - UKRRptDec22

3.2 Macro outlook
Ukraine may suffer one of the worst falls in GDP after a war, the European Bank for Reconstruction and Development (EBRD) predicts in its 2022/23 Transition Report.
In an analysis of the economic damage after wars, the development bank estimated that in half of the countries growth was still below the trend rate in comparator economies 25 years later. Projections indicate that the contraction in Ukraine’s GDP will be among the worst 10-20% of the conflicts in the last 200 years, it says.
In its economic forecast in September, the bank forecast that Ukraine’s GDP will fall 30% this year but will start to recover by growing by 8% in 2023. The World Bank last month predicted a 35% fall in GDP this year. The EBRD will make its next forecast in February.
“The big threat to the [September] forecast is the destruction of infrastructure in Ukraine due to shelling by Russia,” chief economist Beata Javorcik told bne IntelliNews in an interview.
Dragon Capital worsened Ukraine’s GDP forecast. Dragon Capital lowered its forecast for the Ukrainian economy, predicting a 32% y/y decline at the end of 2022, and expects the economy to fall 5% y/y in 2023, reported the company's press service.
The negative impact on Ukraine's economy from power outages resulting from Russia's shelling of energy infrastructure facilities has been moderate. According to the company, the shelling is likely to continue, and increased demand for winter electricity will increase the scale and duration of winter blackouts. Due to this, Dragon Capital worsened the forecast of real GDP this year by 2.0% to -32% y/y and kept the forecast for 2023 unchanged at -5.0% y/y, despite the change in the key assumption regarding the course of the war. It is noted that the GDP forecast for 2023 assumes that Ukraine will gradually liberate the occupied territories and will be able to end the hot phase of the war.
26 UKRAINE Country Report December 2022 www.intellinews.com