Page 5 - UKRRptJun22

Now so far it has received around $11bn in Western financing and this week got another promise from Western allies of close to $17bn in additional financial support. This should see it through to the fall, at least, if fighting continues. But unfortunately most of this Western support has come in the form of loans - sad that the West is only lending Ukraine the money to fight this war which is really providing a bulwark for the West against Russian aggression. But assuming that remains the case, and if the war continues to year end, with a possible 30-40% real GDP contraction, Ukraine’s debt/GDP ratio could well then be over 100%.
Unblocking seaports will allow Ukraine to reduce the decline in GDP. Ukraine's GDP will fall by 30% in 2022, but unblocking seaports would reduce the economic downturn to 22-25%, according to Dragon Capital Chief Economist Olena Belan. According to her, "A 50% GDP decline at the end of the year is a very pessimistic estimate. We can talk about a 30% drop if military action subsides. And if the ports open, we can expect a GDP decline of 22-25%.” At the same time, Alexander Parashchiy, Head of Concorde Capital's Analytical Department, estimates the country's economic downturn in 2022 at 35-40%. "Even if the war ends today, we will be able to restore a maximum of 80% of what was before February. So, on average, during the year we will have a GDP decline closer to 35-45%," he said.
Russia is blocking 22 million tons of food in Ukraine ports. Volodymyr Zelenskyy has accused Russia of blocking the export of 22 million tons of food products and warned that many countries will face a food crisis if its ports are unblocked. "The world community must help Ukraine unblock its seaports otherwise, a food crisis will follow the energy crisis, and many more countries will be faced with it," said Zelenskyy. "We can unblock them in different ways. One of the ways is a military solution. That is why we turn to our partners with inquiries regarding the relevant weapons,” Zelenskyy said. The Ukrainian president also accused Moscow of systematically stealing grain products and subsequent attempts to sell them.
The EBRD has downgraded Ukraine's economic downturn in 2022 and improved its outlook for 2023. The European Bank for Reconstruction and Development (EBRD) has downgraded the forecast for Ukraine's economic decline due to the war to 30%, while at the end of March, the forecast was minus 20%. At the same time, the EBRD forecasts a 20% recovery of the Ukrainian economy in 2023 compared to the previous forecast of 23%. However, the real GDP growth rate will depend on how long the war in Ukraine will last, the terms of the peace agreement, the scale of reconstruction, and the number of refugees returning home, the bank added. At the same time, by the end of 2023, Ukraine's GDP will be 12.5% lower than before the war, the bank predicts. All forecasts may be revised downwards in the event of an increase in hostilities or restrictions on exports of gas or other raw materials from Russia, warns the EBRD.
The number of businesses closed in Ukraine decreased from 32% to 17%. As of the end of April, the number of enterprises that had entirely ceased operations fell to 17% from 32% at the beginning of the full-scale war, as stated in the monthly macroeconomic and monetary review of the National
5 UKRAINE Country Report XXXX 2018 www.intellinews.com