Ukraine’s central bank forecasts remarkable economic turnaround in Ukraine in 2023
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The National Bank of Ukraine (NBU) has improved its economic growth forecast for 2023, from 0.3% to 2.0%, in view of the rapid recovery of the energy system and loose fiscal policy, the NBU’s press service reported on April 27.
“Already this year, the economy will return to growth, which will accelerate in the coming years on the back of a decrease in security risks assumed by the forecast,” reads the report.
No significant electricity shortages or forecasted, except for some local and situational shortages later in the year, should assumptions about the security situation materialize.
An increase in budgetary spending thanks to large volumes of international financial assistance will support economic activity and consumption.
“Security risks starting to subside next year, as assumed by the baseline scenario of the NBU’s forecast, will boost economic growth to 4.3% in 2024 and 6.4% in 2025,” the NBU said.
The liberation of territories and complete unblocking of Black Sea ports will enable a gradual increase in industrial production and crop harvests. Domestic demand is also expected to increase thanks to the return of many displaced persons.
The key assumption in the forecast is that high security risks will persist until early 2024.
Ukraine’s real GDP fell by 29.1% in 2022 due to Russia’s full-scale invasion of the country.
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