(MENAFN- AzerNews) Ukraine's real GDP will grow 4.5% year-on-year in Q4 2023,
Ukrainian media reported, quoting a National bank of Ukraine
forecast, Azernews reports, citing Interfax.
The data is published in the National Bank's new inflation
report.
In its previous inflation report, published in July, the NBU
expected GDP growth to slow to 1.8% in Q4.
According to updated forecast, the Ukrainian Economy will grow
5.4% in Q1 2024, the July forecast being 2.6%, and by 3.5% in Q2,
compared with a previous 2.2% forecast.
The National Bank said real GDP growth slowed to 8.2%
year-on-year in Q3 2023 from 19.5% in Q2.
"Higher yields for the main crops than in the past due to
extremely favorable weather conditions was a significant factor in
the improved dynamics. Yield for early grains not only exceeded the
previous year, but also the record year of 2021, while the sown
areas for most crops remained almost level with the previous year,"
the report says.
The NBU, which raised its GDP growth forecast for this year as a
whole from 2.9% to 4.9%, estimates the bigger harvest will make a
direct positive contribution of 1.3 percentage points to GDP
growth.
The NBU at the end of October slightly improved its forecast for
Ukrainian economic growth next year from 3.5% to 3.6%, lowering it
from 6.8% to 6% in 2025. The regulator said its revised forecast
assumes the conflict in Ukraine will continue at least until the
end of 2024. The unpredictability of the intensity and duration of
the military operation remains the key risk in the forecast.
In the updated inflation report, the NBU singles out as a
separate risk a decrease in the volume and regularity of
international aid, which could result in a resumption of monetary
financing of the Ukrainian budget by the NBU, as well as the risk
of additional budgetary needs and significant quasi-fiscal
deficits. The likelihood of these risks is estimated at 15%-25%,
and the impact on the macro forecast is estimated as strong.
It is mentioned that a continuation of the moratorium on
increasing tariffs for certain housing and utility services amid
the ongoing conflict in the country will only partially offset the
impact of these pro-inflationary factors.
The National Bank considers that delaying decisions to bring
tariffs for housing and communal services to economically justified
levels could result in an accrual of quasi-fiscal deficits and a
deterioration of the financial state of state-owned energy
companies.
"This, in turn, poses the risk of instability in the energy
market and a decrease in the investment potential of this sector,"
the regulator said.
It said that on the other hand, accelerated growth in energy
costs could create additional inflationary pressure and social
tension and necessitate a significant increase in subsidies for
households.
This report, like the previous one, mentions such a factor as a
"Marshall Plan" for Ukraine, which could greatly influence and
improve the macro forecast, and the NBU kept its probability at the
level of 15%-25%.
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