Prompt recovery of Ukrainian economy possible as soon as 2023 - NBU deputy governor
KYIV. May 18 (Interfax-Ukraine) - National Bank of Ukraine (NBU) Deputy Governor Serhiy Nikolaichuk has described the Ukrainian economy's contraction by a third as a best-case scenario, adding that Ukraine's economy will be able to promptly recover in 2023 if the conflict ends and if there is large-scale support from partners.
"... under our most optimistic scenario, the economy may decline by a third. But there could also be worse scenarios," Nikolaichuk told reporters in Kyiv on Wednesday.
When commenting on the European Bank for Reconstruction and Development's (EBRD) forecast that Ukraine's GDP could bounce back by 25% in 2023 following a 30% decline this year, Nikolaichuk agreed that such a scenario is possible if a number of conditions are met.
"One of them is, of course, putting an end to the conflict. The second one is further large-scale support for Ukraine from international partners. If these conditions are met, fast recovery may well become a reality," he said.
The NBU has its baseline forecast for the year, which was published only in an abridged version following the monetary committee's meeting in April, while the bank's forecast for 2023 is not yet available, he said.
"Every organization has its own approach to forecasting. For now, we do not think that there is much point in drawing up mid-term forecasts. We need macroeconomic forecasts in order to adopt monetary policy decisions first and foremost. So far, given the level of uncertainty and the tools available to us, we have decided that it will be enough for us to calculate possible scenarios for this year and to subsequently adjust our steps," Nikolaichuk said.
As reported, the World Bank believes that the Ukrainian economy could contract by 45.1% in 2022, but could bounce back by a mere 2.1% in 2023.
The International Monetary Fund, in turn, expects the Ukrainian economy to decline by 35% in 2022, without offering any forecasts for the following years.