The National Bank of Ukraine (NBU) has improved its forecast for the country’s gross domestic product growth in 2023 to 2 percent from 0.3 percent in its January forecast, which is largely due to lower security risks, the restoration of the energy system, as well as soft fiscal policy.
“The economy will return to growth as early as this year and accelerate in the years ahead on the back of the reduced security risks in the forecast. Given the rapid recovery of the energy system, as well as the soft fiscal policy, the forecast of economic growth in 2023 has been improved from 0.3% to 2%,” the NBU said in a press release on Thursday.
It is indicated that the reduction of security risks from next year, which is allowed in the baseline scenario of the NBU forecast, will accelerate economic growth – up to 4.3% in 2024 and 6.4% in 2025.
Besides, de-occupation of territories and full opening of the Black Sea ports will gradually increase industrial production and crops.
The central bank also expects domestic demand to expand due to the return of some forced migrants.
The regulator noted that under the assumptions of the danger situation, no significant power shortages are envisaged in the future, except for local and situational deficits in the second half of the year.
At the same time, an increase in budget expenditures against the background of significant volumes of international financial aid will support economic activity and consumption.
