Page 42 - UKRRptDec23

optimistic and intends to increase production. However, October exports, particularly road transport, were limited by Poland's policy, and the truckers' strike that began on November 6 further complicates the situation. It has also been noted that the trade deficit reached a new historical high in October and inflation dropped to 5.1%.
Ukraine's economic outlook for 2023 has exceeded expectations, the International Monetary Fund (IMF) said in a statement November 10. The IMF upgraded Ukraine's 2023 GDP growth to 4.5%, up from a range of 1-3% predicted in July. "The Ukrainian economy continues to show remarkable resilience and further signs of stabilization as recent economic developments point to a stronger-than-expected economic recovery in 2023," IMF official Gavin Gray said.
Economic damage from the Polish-Ukrainian border blockade may reach $400M. The interruption of Ukrainian goods' supply by truck through Poland will affect both the export and import of goods to Ukraine. According to preliminary calculations by the National Bank, in 2023 the share of road transport in the value of exports was about 35%, and imports - 70%. "Assuming transport delays at the current level, the maximum monthly reduction is estimated at $160M for exports and $240M for imports," the NBU noted. However, given that the border blockade by Poland began on November 6, the reduction of exports and imports in November will be smaller than the given estimates. According to customs data, in October 2023, imports into Ukraine increased to $5.64B (against $5.36B on average for the third quarter and $5.07B for the first half of the year); exports did not change significantly at $2.68B.
Large harvests allow the NBU to improve its GDP forecast for this year.
According to the Inflation Report for October, an estimate of real GDP growth is due to a better-than-expected harvest of major crops. The National Bank improved its real GDP growth estimate by the end of the year to 4.9%. "The yield of early cereals not only exceeded the previous year but also the record year of 2021, while the sown area for most crops remained almost at the previous year’s level. As a result, the harvest estimate has been improved both for 2023 and for the following years," the report said. The direct positive contribution of higher yields to GDP was estimated at 1.3 percentage points. The regulator explained that the crops were harvested faster thanks to favorable weather, which led to a high growth rate. At the same time, the increase in vegetable production in the southern and central regions also had an additional effect. All this compensated for the negative impact of the destruction of the Kakhovka HPP," the NBU noted.
IMF: Ukrainian economy shows signs of 'stronger-than-expected' recovery. The IMF upgraded Ukraine's 2023 GDP growth to 4.5%, up from a range of 1-3% predicted in July.
42 UKRAINE Country Report December 2023 www.intellinews.com