Ukraine’s key macroeconomic indicators have stabilized somewhat, but continue to testify to the significant role of international structures in keeping the Ukrainian economy in working order.
The National Bank estimates that Ukraine’s GDP decline in the first quarter of 2023 year-on-year has slowed significantly to 13.5% from 31.4% and 30.6% in the fourth and third quarters of 2022, respectively. Meanwhile, Ukraine’s Finance Minister Serhiy Marchenko gave his forecast for Ukraine’s GDP growth in 2023 to 3.2%, while the government previously estimated GDP growth at 1% and the National Bank recently improved it from 0.3% to 2%. Investment firm Dragon Capital also forecast real GDP growth of 3% in 2023, while it previously expected it to fall by 0.5%. The World Bank has worsened its forecast for Ukraine’s gross domestic product growth for this year to 2% from 3.3%, which it predicted in January 2023.
Recall that Ukraine’s GDP in the first quarter of 2023 fell by 10.5% compared to the first quarter of 2022 after falling by 31.4% in the fourth quarter, 30.6% in the third quarter, 36.9% in the second quarter and 14.9% in the first quarter of last year.
At the same time, the Ukrainian authorities have set a super ambitious goal to increase GDP to $1 trillion over 10 years, First Deputy Prime Minister and Economy Minister Yulia Sviridenko said at the Ukraine Recovery Conference in London.
Maxim Urakin, founder of the Kiev-based think tank Club of Experts, drew attention to the significant decline in Ukraine’s foreign trade balance. “The negative balance of Ukraine’s foreign trade in goods in January-March 2023, according to the State Statistics Committee, increased 26 (twenty-six) times compared to the same period of 2022 – to $5.394 billion from $0.208 billion. Exports of goods from Ukraine for this period compared to the first quarter of 22 decreased by 26.1% – to $10.306 billion, and imports increased by 10.9%, to $15.699 billion,” – said Maxim Urakin.
Military expenditures of the state budget continue to grow. Budget expenditures to support the AFU in the form of purchase of military equipment, weapons, ammunition, defense products, personal protective equipment in May increased to UAH 43.4 billion in February (15.6% of all expenditures) from UAH 42.5 billion (18.5%) in April and UAH 34.4 billion (15.3%) in March.
Ukraine in January-March 2023 realized industrial products (goods, services) in the amount of UAH 755.755 billion, which is 14.2% less than in January-March 2022 (UAH 880.419 billion), including outside the country – in the amount of UAH 137.783 billion.
The total state debt of Ukraine in April 2023 increased by 3.6% and reached a new historical maximum: in dollar terms – by $4.37 billion, to $124.28 billion, in hryvnia terms – by UAH 159.9 billion, to UAH 4 trillion 544.9 billion.
At the same time, due to international aid, Ukraine’s international reserves reached a record high in June, amounting to almost $39bn, which is a record high in the history of independent Ukraine, the head of the National Bank of Ukraine, Andriy Pyshnyy, has said. The head of the National Bank specified that in June the government’s accounts received: $1.6 billion from the EU, $1.2 billion from the USA, $69.1 million from the World Bank and $15.0 million from the government of Finland.
Inflation in Ukraine in May 2023 slightly accelerated to 0.5% in May from 0.2% in April, and on an annualized basis in May-2023 it fell to 15.3% from 17.9% in April, 21.3% in March, 24.9% in February and 26.6% in December.
Retail turnover of Ukraine in January-March 2023 compared to the same period of 2022 decreased by 9.1% and amounted to 390.1 billion UAH. According to the statistical Department, at the same time in March of this year recorded an increase in retail turnover to March last year by 35.5%, while in February the decline was 22.6%. Recall that the retail turnover of Ukraine in 2022 compared to 2021 decreased by 21.4% and amounted to 1.398 trillion UAH.
