10 Jan 2023 14:20

Ukrainian Economy Ministry expects 2022 GDP to decline by 30.4%

MOSCOW. Jan 10 (Interfax) - Ukraine's real GDP is expected to drop by 30.4% (±2%) in 2022, which is better than previous forecasts, Ukrainian media reported on January 5 with reference to the Economy Ministry's press release.

In particular, the ministry assessed GDP decline in December at 34% (±2%) compared to 37% (±2%) in November, taking into account some stabilization of power supply, the ministry said.

In its view, Ukraine's GDP dropped in the fourth quarter of 2022 by 35.5% (±2%), which is worse than in the third quarter, according to the State Statistics Service (30.8%), but better than in the second quarter, when the economy shrank by 37.2%.

The ministry mentioned that, according to the State Statistics Service, Ukrainian GDP fell by 15.1% in the first quarter of 2022, after having grown by 3.4% in 2021.

The ministry had said earlier that damage caused to the Ukrainian power supply infrastructure worsened GDP decline to about 39% in October and 41% in November, which initially prompted it to worsen the 2022 GDP decline forecast from 32% to 33.2%, but it later revised it up to 32%.

Top managers of the National Bank of Ukraine said at a press briefing on December 8 that damage caused to the power supply infrastructure prompted them to worsen their previous 31.5% GDP decline forecast for 2022, although they did not specify by how much. The International Monetary Fund (IMF) expects Ukraine's economy to drop by 33% in 2022.

The Economy Ministry maintained its forecast for GDP growth in 2023 by 3.2%, while the IMF's baseline scenario envisions it to grow by 1%. At the same time, the IMF also has two more scenarios, namely a negative one, with GDP dropping by another 12.5%, or by up to 57% from the pre-crisis level, and a positive one, with its growth by 10%, or up to 75% from the pre-crisis level.

The NBU has said earlier that, even according to a baseline and relatively optimistic scenario for 2023, GDP growth would be very weak and far lower than 4%, which it had predicted in its October forecast.