Ukrainian National Bank confirms 3% GDP growth in 2024, says risks of downgrading prevail

MOSCOW. June 25 (Interfax) - The risk of downgrading the 3% GDP growth forecast for Ukraine this year prevails, but the outlook remains valid for now, Ukrainian National Bank deputy head Sergei Nikolaichuk said.

"I think that the risks of downgrading our forecast prevail after all, although being partially levelled off by a better situation of the first five months of the year, compared to our tentative estimates," Ukrainian media cited Nikolaichuk as saying at a discussion of macro-economic forecasts for 2024-2025 hosted by the Center for Economic Strategy on Monday.

The status of the energy sector and the fallout from mobilization and migration on Ukraine's labor potential are the factors to shape the national economic dynamics this year, Nikolaichuk said.

Investments of businesses, local authorities and the national government in the energy sector, aimed to ensure its smooth operation, may give a brief boost to economic activity this year and somewhat level off the limited supply, he said.

He noted the importance of reducing labor supply constraints by various measures to attract more of female workforce as well as using other economic policy options to that end.

As reported, the Ukrainian National Bank downgraded the GDP growth forecast from 3.6% to 3% this year, versus 5.3% last year.

While approving a draft budget before the second reading in early November 2023, the government forecasted a 4.6% economic growth in Ukraine in 2024. However, the Finance Ministry said lately that the forecast had been downgraded to 3.5%, and First Deputy Prime Minister Yulia Sviridenko said in Berlin in mid-June that the forecast had been reduced to less than 4%.

In turn, the Economy Ministry said that the year-on-year GDP growth in Ukraine slowed down to 3.7% in May from 4.3% in April, alongside a decline from 4.5% over the first four months of the year to 4.3% in January-May.