The International Monetary Fund (IMF) forecasts Ukraine’s GDP growth in 2024 at 3% and inflation at 9%. In an exclusive commentary to Komersant ukrainskyi
The IMF’s previous forecast envisaged GDP growth in the range of 2.5% to 3.5% and inflation of 8%.
According to the IMF’s updated forecast, economic growth in Ukraine will slow in the second half of 2024 due to the effects of Russian attacks on energy infrastructure, the impact of the war on the labour market, and the level of business activity expectations, the National Bank said in a release.
“The forecast for real GDP growth in 2024 is at 3%, and inflation – up to 9%. Solving the problem of electricity shortages on the eve of winter is critical and requires coordinated efforts, including with the participation of international partners,” the statement said.
The IMF expects economic growth in 2025 to be 2.5-3.5%. At the same time, the risks of the forecast are extremely high.
The IMF also noted the stability and liquidity of the financial sector and the rapid pace of reforms despite the difficulties of martial law. To maintain financial stability and increase preparedness for potential shocks, the priority is to strengthen the system of bank resolution, contingency planning, and bank governance.
“The room for further monetary policy easing by the end of the year has decreased due to the risks of rising inflation, but the NBU’s policy is adequate and consistent with achieving the inflation target in the medium term,” the report says.
As noted, timely and predictable external financial support on terms consistent with debt sustainability remains essential to maintaining economic stability.
In an exclusive comment to Kommersant Ukrainian
“It is the prolongation of the war and the intensification of, say, Russian shelling of Ukrainian energy and infrastructure facilities that are direct not only military but also economic losses. And of course, under such conditions, it is quite logical that the overall economic situation in Ukraine is deteriorating, both because of blackouts and because of the need for much higher costs to eliminate the consequences of these massive shelling across Ukraine,” the expert explained.
Despite these difficulties, Novak believes that after Ukraine’s victory, the economic recovery could be completed quite dynamically.
“Of course, after our victory, the economic recovery will be quite dynamic, I hope. Since certain patronage of certain territories and regions of Ukraine has already been announced, the first priority will be given to rebuilding and restoring infrastructure. Therefore, let’s hope that after our victory, economic recovery and reconstruction will be highly dynamic,” the economist predicts.
As a reminder, Fitch Ratings has downgraded Ukraine’s credit rating in connection with the start of the Eurobond restructuring.