The Ministry of Economy of Ukraine predicts a slowdown in GDP growth in 2022 to 33.2%, confirmed by the trends observed in the second quarter and August.
On September 8, the State Statistics Service of Ukraine published data noting the GDP decline in the second quarter amounted to 37.2% (compared to the second quarter of 2021), which was under the previous estimates of the Ministry of Economy (40.6%).
In August, according to the Ministry of Economy, the indicator of the gross domestic product is lower than last year by approximately 35%. That is, the pace of GDP decline is slowing down.
Macroeconomic indicators in August were positively influenced by the partial unblocking of grain exports from the ports of Great Odesa to the EU countries, as well as the acceleration of the pace and volume of grain collection in the territory controlled by Ukraine. As of the end of August, 25.3 million tons of crops were harvested.
“Ukraine is strengthening the economy in the extremely difficult conditions of wartime,” commented the First Deputy Prime Minister – Minister of Economy of Ukraine Yulia Svyrydenko. “In the future, the pace of recovery will depend on the situation at the front, the scale and speed of receiving donor aid, the availability of ports for export, the return of Ukrainians from abroad and the growth of labor productivity. Today there are grounds for cautious optimism. Until the end of 2022, we expect the GDP decline to slow down to 33.2%. When forming the state budget for 2023, we will proceed from a conservative scenario of the developments, which will allow the state to reduce budgetary risks and fully fulfill all its obligations to its citizens.”
An improvement in business expectations regarding the prospects of its economic activity can be observed: the business activity expectations index (BAEI) in August was 44.1 against 43.6 in July.
The improvement of the logistics chains of the import of petroleum products and the diversification of suppliers have stabilized fuel prices, which reduced inflationary pressure on the economy against the background of falling external prices, especially for energy carriers and food.
In August, Ukraine received a significant amount of international aid – $4.6 billion, including $3 billion in grant funds from the United States through the World Bank. In the near future, this allows to ensure macroeconomic stability and cover military expenses as well as to reduce the budget deficit.
Government business support programs – Affordable Loans at 5-7-9, eRobota, Relocation of Enterprises – help the economy adapt to the realities of the war and gradually restore the work of enterprises. (Government portal/Business World Magazine)
