Page 30 - UKRRptOct23

In a separate development, the National Bank of Ukraine adjusted its GDP growth forecast for the nation in 2023, upgrading it from 2% to a more optimistic 2.9%. However, for the year 2024, the growth forecast was slightly revised downward from 4.3% to 3.5%. the NBU expects second quarter growth in 2023 of 18.1%.
The Ministry of Economy in Ukraine remains optimistic about the nation's economic prospects, forecasting a GDP growth rate of 4% for 2023 and a further acceleration to 5% in the subsequent year as the economy continues to stabilise and the war is largely contained in the east and south of the country.
Ukraine's economy grew by 8% in August. The growth of Ukraine's real GDP in August remained close to 8% compared to August 2022, but the GDP was more than 20% lower than 2021's level, the Institute of Economic Research (IER) reported. According to experts, the termination of the grain agreement increased the EU's share of Ukrainian merchandise exports to 73%, despite the current restrictions. As for the financial markets, the experts pointed out that lower-than-expected inflation and a stronger hryvnia than assumed during the drafting of the 2023 state budget present challenges in implementing the state budget revenue plan. "In August, there was no usual grant from the US, but the EU provided a regular loan tranche. The NBU's international reserves decreased somewhat but remained high thanks to the receipt of a soft loan from the EU," the IER noted. In August, consumer inflation returned to a single-digit level for the first time in more than two years and amounted to 8.6% thanks to a record drop in vegetable prices.
The Ministry of Finance of Ukraine also "positively" revised its forecast for Ukraine's GDP. According to 2023's activity, Ukraine's GDP will grow by more than 3%, Minister of Finance Serhii Marchenko said. "The balance of payments has been adjusted thanks to external infusions. The NBU's reserves and the hryvnia are strengthening, but exports are not growing, and imports are increasing, which is an alarming signal," said Marchenko. In addition, the world economy's recession could significantly affect Ukraine's support from its partners. However, according to the minister, the governments of the most developed countries have already gone through a difficult inflationary period with minimal economic losses. Meanwhile, the European Commission forecasts that EU economic growth will slow to 0.8% in 2023 and 1.4% in 2024 and in the eurozone to 0.8% and 1.3%, respectively. In the spring, the EC predicted the EU economy to grow by 1% in 2023 and 1.7% in 2024 and the eurozone by 1.1% and 1.6%, respectively.
30 UKRAINE Country Report October 2023 www.intellinews.com