The motherland monument in Ukraine

Ukraine Economic Forecast

Ukraine Economic Outlook

The economy should have shrunk at a steeper annual pace in Q4 due to Russia’s attacks on energy infrastructure. Business activity and industrial output were decimated by electricity shortages, while infrastructure repairs, agricultural exports and foreign aid likely prevented a steeper slump. In Q1 2023, annual GDP is likely contracting for the fifth consecutive quarter but at a milder pace. In February, the National Bank of Ukraine’s business activity expectations index improved notably thanks to reviving activity in most sectors. That said, power shortages, higher production costs of alternative energy sources and dull domestic demand are hindering activity. Meanwhile, Turkey is seeking to extend the Black Sea Grain Deal past its 18 March expiration date. In addition, on 2 March, the U.S. announced new partnerships amounting to USD 44 million supporting Ukraine’s agricultural sector.

Ukraine Inflation

Inflation eased to 26.0% in January on softer food and transport price pressures (December: 26.6%). In 2023, lower commodity prices, lackluster domestic demand and a restrictive monetary policy stance should see the headline rate cool from current levels. However, average inflation will exceed the Central Bank’s 5.0% target this year due to spillovers from the war.

Ukraine Economic Data

2017 2018 2019 2020 2021
Population (million) 44.7 44.4 44.2 43.9 43.5
GDP (USD bn) 112 131 154 156 200
GDP per capita (USD) 2 2 3 3 4
GDP (EUR bn) 99 111 138 137 169
GDP per capita (EUR) 2 2 3 3 3
GDP (UAH bn) 2 3 3 4 5
Economic Growth (Nominal GDP, ann. var. %) 25.1 19.3 11.7 6.1 29.3
Economic Growth (GDP, ann. var. %) 2.4 3.5 3.2 -3.8 3.4
Private Consumption (ann. var. %) 9.5 9.3 10.9 1.7 7.7
Government Consumption (ann. var. %) 5.2 -0.1 -13.6 -0.7 1.8
Fixed Investment (ann. var. %) 16.1 16.6 11.7 -21.3 7.5
Exports (G&S, ann. var. %) 3.9 -1.4 7.3 -5.8 -10.5
Imports (G&S, ann. var. %) 12.9 2.8 5.7 -6.4 12.7
Industrial Production (ann. var. %) 1.1 3.0 -0.5 -4.5 1.9
Retail Sales (ann. var. %) 8.6 5.6 11.6 7.2 10.9
Wages (ann. var. %) 37.0 24.8 18.5 10.4 20.9
Unemployment (% of active population, eop) 9.9 9.3 8.7 10.1 10.6
Fiscal Balance (% of GDP) -1.4 -1.9 -2.2 -5.3 -3.4
Public Debt (% of GDP) 71.8 60.9 50.2 60.4 48.9
Money (ann. var. of M2 %) 9.6 5.4 12.7 28.7 12.0
Inflation (CPI, ann. var. %, eop) 13.7 9.8 4.1 5.0 10.0
Inflation (CPI, ann. var. %, aop) 14.4 11.0 7.9 2.7 9.4
Inflation (PPI, ann. var. %, eop) 16.6 14.2 -7.4 14.2 62.2
Key Policy Rate (%, eop) 14.50 18.00 13.50 6.00 9.00
Stock Market (ann. var. of PFTS %) 18.8 77.5 -8.9 -1.9 4.6
Exchange Rate (UAH per USD, eop) 28.16 27.71 23.70 28.34 27.28
Exchange Rate (UAH per USD, aop) 26.60 27.19 25.81 26.99 27.28
Exchange Rate (UAH per EUR, eop) 33.78 31.78 26.57 34.61 31.02
Exchange Rate (UAH per EUR, aop) 30.05 32.10 28.91 30.86 32.27
Current Account Balance (USD bn) -3.5 -6.4 -4.1 5.3 -3.9
Current Account Balance (% of GDP) -3.1 -4.9 -2.7 3.4 -1.9
Merchandise Trade Balance (USD bn) -9.7 -12.7 -14.3 -6.8 -6.6
Merchandise Exports (USD bn) 39.7 43.3 46.1 45.1 63.1
Merchandise Imports (USD bn) 49.4 56.1 60.4 51.9 69.8
Merchandise Exports (ann. var. %) 18.3 9.2 6.3 -2.1 39.8
Merchandise Imports (ann. var. %) 21.9 13.6 7.7 -14.0 34.3
Foreign Direct Investment (USD bn) 3.7 4.7 6.0 0.0 6.5
International Reserves (USD bn) 18.8 20.8 25.3 29.1 30.9
International Reserves (months of imports) 4.6 4.5 5.0 6.7 5.3
External Debt (USD bn) 115 115 122 126 130
External Debt (% of GDP) 102.9 87.6 79.0 80.4 64.8

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