Ukraine’s economy is going to get back to growth in 2021 – the country’s GDP is expected to sprout by 3.5% annually in 2021 and 2022. Such is the refreshed forecast produced by European Bank for Reconstruction and Development (EBRD).
The main risks for this forecast coming true are associated with the slow pace of reforms and vaccination. The bank explains that the decrease of demand overseas combined with the numerous lockdowns impact on domestic demand have jointly condition the GDP fall by 4% in 2020. However, the improved macrofinancial management came very beneficial at the crisis time and helped the country to preserve its macroeconomic stability.
“Though in the first quarter of 2021 there was a recess in the economy by 2.2% as compared to the previous year due to the lockdown continuation, there are showings of gradual return to growth in the second quarter thanks to the rise of prices on commodities”, the EBRD leading regional economist Dimitar Bogov pointed out.
Ukraine’s industrial output for January-April 2021 enlarged by 1.5% comparing to the last year, while the export and import numbers increased in the first quarter correspondingly by 12% and 11%, as witnessed by the bank experts.
EBRD is also focusing the attention on the fact that the remittances have grown from January to April 2021 by 7% if compared to the same period a year ago, while the inflation in 2021 accelerated on the background of global boost of prices on foodstuffs, and in May it reached 9.5%, due to which National Bank of Ukraine (NBU) raised its rate twice, the last time up to 7.5% in April 2021.
Earlier World Bank had improved the Ukraine’s economy restoration in 2021 forecast up to 3.8%. as per the bank’s forecasts, in 2022 and 2023 Ukraine’s GDP is going to rise by 3.1%.
Ministry of Economy and Trade of Ukraine predicts the country’s GDP increasing by 4.1% in 2021.
Yet, NBU has forestalled the GDP growth in 2021 worsening down from 4.2% to 3.8%, while the inflation from 7% to 8%.
International Monetary Fund (IMF) in its April forecast has improved the GDP of Ukraine growth foreseen in 2021 up to 4% from 3% as of its October forecast. In 2022 IMF expects Ukraine’s GDP rising at the level of 3.4% – the forecast is improved from 2.7% of the previous report. Moreover, IMF anticipates Ukraine’s average annual inflation enlarging up to 7.9% in 2021 after the decrease to 2.7% in 2020, and further decreasing down to 6.8% in 2022.