Business news from Ukraine

Key macroeconomic indicators of Ukraine in July-August 2023 by Experts club

2 October , 2023  

The article summarizes and analyzes the main macroeconomic indicators of Ukraine. In connection with the entry into force of the Law of Ukraine “On Protection of the Interests of Business Entities during Martial Law or a State of War”, the State Statistics Service of Ukraine suspends the publication of statistical information for the period of martial law and for three months after its termination. The exception is the publication of information on the consumer price index, separate information on statistical indicators for 2021 and for the period January-February 2022. The article analyzes open data from the State Statistics Service, the National Bank, and think tanks.

Demographic indicators of Ukraine
Speaking about the demographic factor in the development of the Ukrainian economy, Maksym Urakin cited the data previously announced by the Director of the Ptukha Ella Libanova Institute for Demography and Social Studies. Ella Libanova, depopulation is an inevitable scenario for Ukraine. A labor shortage is absolutely inevitable.
According to the estimates she presented at the Regional Economic Forum, as of the beginning of this year, the population in the government-controlled areas was 31.6 million people, and now it has slightly increased. Libanova pointed out that the population forecast for the beginning of 2033 within the borders of 1991 Ukraine ranges from 26-35 million people.
According to her, the potential for demographic growth has been exhausted, and this can be offset by migration.

Economic recovery
Ukraine’s real gross domestic product grew by 19.5% in the second quarter of 2023 compared to the second quarter of 2022.
“According to the State Statistics Service’s preliminary estimate, compared to the previous quarter (seasonally adjusted), GDP in the second quarter of this year grew by 0.8%,” said Maksym Urakin.
The key risk for our economy remains the longer duration and intensity of the war, as well as a decrease in the volume or loss of rhythm of international assistance, the resumption of a significant electricity shortage due to further destruction of the energy infrastructure and other risks.
Analysis of Ukraine’s foreign trade
Maksym Urakin also drew attention to the factor of the growing negative foreign trade balance, which has been observed since the beginning of the war.
“The negative balance of Ukraine’s foreign trade in goods in January-July 2023 tripled compared to the same period in 2022, to $13.8 billion from $4.315 billion. This means that the cost of purchasing the goods Ukraine needs is almost $14 billion higher than the income from exporting Ukrainian goods to other countries,” said Urakin, PhD in Economics.

Ukraine’s financial situation in 2023
However, according to the expert, no less important aspects of the economy are public debt, international reserves, and inflation.
“In July 2023, Ukraine’s total public debt increased by 3.1% to a new all-time high: by $4 billion in dollar terms, to $132.92 billion. In its inflation report at the end of July, the National Bank of Ukraine expects the public debt to grow from 78.4% of GDP to 84.6% of GDP this year, to 96.6% of GDP next year, and to 98.2% of GDP in 2025,” said Maksym Urakin.
According to the expert, the main source of funding for Ukraine’s budget is still related to foreign aid.
“Half of the budget is financed through taxes and fees, while the other half is financed through international grants and loans,” he emphasized.
“Ukraine’s international reserves declined in August and amounted to $40.3 billion as of September 1, 2023,” the analyst added.
As for inflation, it showed a slowdown.
“In August 2023, inflation in Ukraine decreased by 1.4% after a 0.6% decline in July and a 0.8% increase in June. In 2022, the annualized inflation rate was almost 27%,” Urakin said.
Thus, the economic situation in Ukraine, according to the founder of the Club of Experts, continues to be complex and multifaceted, requiring close monitoring and adaptation of strategies in response to changing conditions.

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