3 Apr 2023 16:13

Ukrainian GDP could grow 1% in 2023 - IMF

MOSCOW. April 3 (Interfax) - The International Monetary Fund, which had estimated Ukrainian GDP growth at between minus 3% and plus 1% in 2023, is now leaning towards the top of that range.

Ukrainian media quoted IMF information published in the early hours of Saturday as saying this was due to new data that real GDP fell slightly less than estimated in 2022, by 29.2% instead of 30.3%, due to a fourth quarter decline of 31.4% instead of a previously estimated 35%.

"This reflects a less severe than expected impact on economic activity from the countrywide power outages stemming from the attacks on critical energy infrastructure, as well as increased spending for repairs," the IMF said.

Accounting for a stronger Q4 2022 would, all else equal, help lift growth in 2023 by reducing negative carryover effects.

As reported, the IMF is forecasting growth to accelerate to 3.2% in 2024 and 6.5% in 2025.

The Fund estimates the Ukraine's GDP fell in nominal terms last year to UAH 4.9 trillion from UAH 5.46 trillion in 2021 and expects this to grow to UAH 6.05 trillion in 2023 and UAH 7.365 trillion in 2024.

Inflation could slow from 26.6% last year to 20% this year, and to 12.5% in 2024 and 8% in 2025, reaching the National Bank's target level of 5% in 2027.

Real wages, which fell 21.1% last year, could decrease by another 2% this year and 2.5% next year, and then grow 5%.

The level of unemployment rate will decrease from 24.5% in 2022 to 20.9% this year, to 11.9% next year and to 9.7% in 2025.

The Ukrainian government also forecasts GDP growth of 1% this year. The National Bank in January lowered its estimate to 0.3%, but recently said it was highly likely to be revised up, including by 1 percentage point due to a better than expected energy supply situation.