Page 53 - UKRRptJul24

Ukraine's real GDP increased by 6.5% compared to the same period last year, according to the State Statistical Service. A year earlier, according to the results from the first quarter of 2023, a decrease of 10.3% in annual terms was observed for real GDP. At the same time, it is noted that in January-March, the real GDP also increased compared to the previous quarter by 1.2% (considering the seasonal factor). This means that in the first quarter, the Ukrainian economy reached almost 82% of the pre-war level. According to the NBU's forecast, in the first quarter of 2024 a 3.1% increase in annual terms was expected, and according to the Ministry of Economy's estimates, 4.5%. In March of this year, compared to last year, almost all aggregated types of economic activity positively contributed to the GDP's total volume.
The CES provides a forecast for key macro indicators through the end of the year. The Ukrainian economy will grow by 3-4% by the end of 2024, which is less than 2023, according to the macro forecast from the Center for Economic Strategy (CES). As experts explain, the pessimism regarding GDP growth forecasts is primarily caused by the losses suffered by the Ukrainian energy infrastructure due to Russian attacks. Inflation is expected at 7.5% according to the average forecast and over 9% according to the highest. At the same time, it is lower than the expectations in December, when the maximum inflation level reached 13%. The average expectation for financing needs in Ukraine's state budget amounts to $53B, while the IMF forecasts $43B. This is less than the $60B figure for 2023. Despite this, experts estimate the difference between budgetary needs and international support this year to be about $17B. Therefore, the state and state-guaranteed debt will not exceed 100% of GDP and amount to 94-96%. The hryvnia is expected to weaken in 2024. The dollar exchange rate will be around ₴40 per $1 and may rise to ₴42 per $1 by the end of the year.
The National Bank has summarized the economic results for April-May.
Here arethe leading indicators:
● Inflation in April remained the same as in March - 3.2% annually. This was facilitated by a drop in prices for raw food products and persistent inflationary expectations.
● Business expectations and consumer sentiment worsened in May. The reason was limitations in electricity consumption and availability.
● The labor market recovered more slowly in May: growth in labor demand slowed, but supply remained limited. This, in turn, continued to put upward pressure on wages, which increased household incomes.
● The foreign trade deficit narrowed in April. This follows a reduction in expenses for war refugees abroad and a significant increase in corn exports.
● International reserves were $42.4B at the end of April and $39B at the end of May. The volume of international aid decreased compared to March.
● The state budget deficit in May expanded rapidly due to significant expenditures. These were primarily financed by international aid.
● The situation in the FX market was controlled due to intervention by the NBU.
53 UKRAINE Country Report July 2024 www.intellinews.com