Ukrainian Economy Ministry expecting 4% GDP growth in 2024

MOSCOW. Oct 6 (Interfax) - The Ukrainian Economy Ministry is expecting a 4% GDP growth in 2024, compared to 5% forecasted earlier, and the new outlook may be included in the draft budget 2024, Ukrainian First Deputy Prime Minister, Economy Minister Yulia Sviridenko said.

"What do we forecast for next year? I would say we are observing a recovery growth. [...] We expect about 4% [GDP growth in 2024]," Ukrainian media quoted Sviridenko as saying at the Dialogues on Stability meeting in Kiev on Thursday.

The Economy Ministry remains more optimistic than the National Bank in its assessment of this year's GDP growth - 4% versus 2.9%, Sviridenko said.

"What will be the source of this growth? The impulse comes from the Ukrainian budget replenished with macroeconomic assistance, which is spent on paying salaries to the military and on social expenses, thus creating demand on the market, as well as from assistance programs," Sviridenko said.

All industries are demonstrating a year-on-year growth, which reaches 10% in machine building, she said.

The eOselia state mortgage program may also contribute to the growth: about 40,000 applications have been filed, compared to about 11,000 mortgage loans issued in the pre-crisis year 2021, Sviridenko said.

"As of now, 3,500 mortgage loans [have been issued], and we are expecting up to 10,000 [loans to be issued] before the end of this year," she said.

At the same time, Sviridenko described unemployment as one of the most pressing economic problems. The ministry forecasts an unprecedentedly high employment rate of 18.6% in 2024, whereas unemployment did not exceed 10% even during the pandemic, she said. Business is dealing with structural unemployment, when skills of the applicants fall short job requirements, Sviridenko said. So, the government plans to launch training and professional development programs of six to seven months, she said.

The government does not plan to raise tax rates next year but hopes that the tax base will grow through the development of businesses, Sviridenko said.

As reported, the National Bank of Ukraine upgraded the 2023 GDP growth outlook from 2% to 2.9% in late July, while downgrading the 2024 GDP growth outlook from 4.3% to 3.5%.

The Economy Ministry earlier expected the Ukrainian GDP to grow 4% in 2023 and another 5% in 2024.

In turn, the World Bank expects the Ukrainian GDP to grow 3.5% in 2023 and 4% in 2024.