World Bank forecasts Ukraine GDP growth of 3.2% in 2024

MOSCOW. Jan 10 (Interfax) - The World Bank has raised its estimate of Ukraine's gross domestic product growth in 2023 to 4.8% from 2% six months ago, and is now forecasting growth of 3.2% in 2024.

Ukraine's prospects remain highly uncertain, its growth forecast estimated at 3.2% in 2024 and 6.5% in 2025, Ukrainian media reported, referencing the World Bank's January Global Economic Prospects report. Partial resolution of uncertainty in 2025 will contribute to the resumption of exports and a gradual increase in investment, it said.

The bank noted that Ukraine's GDP growth over the past year has been supported by improved access to electricity, higher harvests and additional government spending, albeit at the expense of widening budget and current account deficits.

For the Europe and Central Asia region as a whole, the bank forecasts growth to remain below pre-pandemic levels: 2.4% this year, compared with 2.7% in 2023, 1.2% in 2022 and 7.1% in 2021.

"Geopolitical tensions continue to pose downside risks [...] Intensifying tensions and conflicts could worsen already-heavy human and economic losses," the World Bank said.

The bank notes the possibilities of escalating tensions between Armenia and Azerbaijan, Kosovo and Serbia, and the large number of presidential, parliamentary and local elections in the region in 2024, which increases uncertainty about future economic policy.

At the end of October, the National Bank of Ukraine improved the country's GDP growth forecast for 2023 from 2.9% to 4.9%, and from 3.5% to 3.6% for 2024, while worsening the forecast for 2025 from 6.8% to 6%, the World Bank said in the overview.

The Ukrainian government in early November improved its GDP growth estimate for 2023 from 2.8% to 5%, but worsened it for 2024 from 5% to 4.6%. For 2025, the government expects growth to accelerate to 6.8%, the World Bank said.