Stably high interest rates in the world’s largest economies mean that global economic growth is likely to slow in 2024 after this year’s rate of recovery exceeded expectations, the Financial Times writes, citing the opinion of economists.
Thus, according to the forecast of the consulting company Consensus Economics, in 2024 GDP will grow by 2.1% compared to 2.4% expected in the economy this year. Meanwhile, the estimate for 2023 was raised from the 1.4% assumed at the beginning of the year due to unexpectedly strong consumer demand and labor market.
Capital Economics senior global economist Simon Macadam also believes that the expected slowdown in economic growth next year will be partly due to a more substantial rebound in 2023. However, he added that economists “have actually become more pessimistic about the outlook for 2024”.
This is due to beliefs that persistently strong demand will keep inflation higher for longer, pushing advanced economy Central Banks to keep rates high throughout the year.
“Demand is barely weakening, the labor market remains strong, and wages continue to rise,” notes Citi Chief Economist Nathan Sheets. – Some of the weakening in the economy (which was expected this year – IF-U) is being carried over to 2024.” In many countries, including the U.S., “there will be a recession, it will just come later,” he predicts.
Until a few months ago, the Federal Reserve was expected to start cutting rates this year. But the resilience of the U.S. economy indicates there is a small possibility that the Fed could raise borrowing costs by another quarter-point in September, to 5.5-5.75% per annum. And economists now expect the first rate cut to occur next spring.
The high probability that the U.S. economy will avoid recession this year “means the Fed will hold rates higher longer to fully suppress inflation, leading to slower growth in 2024,” according to Mark Zandi, chief economist at Moody’s Analytics.
On average, economists forecast the U.S. economy to rebound 0.6% in 2024 after expanding 1.9% at the end of this year.
Europe’s economies have also performed “somewhat better than expected” this year, with the exception of Germany, meaning the European Central Bank and the Bank of England are also likely to keep rates on hold for longer, Zandi said.
The ECB raised its deposit rate from minus 0.5% per annum in June 2022 to the current 3.75% and is not expected to cut it for most of next year. The Bank of England is forecast to increase its cost of borrowing by a further half a percent to 5.75% by the end of this year and is unlikely to start cutting it until the second half of 2024.
Christian Keller, head of economic research at Barclays, notes that the negative investor sentiment towards 2024 is also due to a slowdown in China’s GDP growth after a significant acceleration following the removal of anti-Kowitz restrictions.
Experts Club Research Project and Maxim Urakin recently released an analytical video on the Ukrainian and global economies
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The YouTube channel “Experts Club” has published a new video in which the founder of this think tank, Maksym Urakin, provides his analysis of Ukraine’s macroeconomic indicators and the state of the global economy in the first half of 2023.
Demographic indicators of Ukraine
Speaking about the demographic factor in the development of the Ukrainian economy, the expert cited data from the Opendatabot portal, which shows that the birth rate in the country continues to decline. According to these data, about 97 thousand children were born in the first half of 2023, which is 28% less than in the same period of 2021.
“The birth rate has been declining by about 7% annually since 2013. However, the full-scale war has aggravated the situation, causing the largest crisis in natural population growth. The demography of our country continues to be under pressure due to the current circumstances,” said Maksym Urakin.
According to him, in the first half of 2023, the number of marriages fell by 17% compared to the same period last year, while the number of divorces increased by a third, especially in Kyiv.
Economic recovery
Turning to the macroeconomic sphere, the economist emphasized that the Ukrainian economy has started to show signs of recovery.
“According to the NBU, Ukraine’s economy grew by 18.3% in the second quarter relative to the same period last year. This growth is relative to the period of the greatest decline at the beginning of the war.”, – said the founder of the club of experts.
Nevertheless, Maxim Urakin expressed concerns about the long-term outlook.
“Despite the current positive trend, the main risk for the Ukrainian economy continues to be related to the duration and intensity of the war. This may complicate the recovery, as well as cause problems with inflation and currency exchange rate,” Urakin noted.
According to him, the main negative factors affecting economic activity are a decrease or instability of international aid, as well as possible further destruction of energy infrastructure and problems with electricity supply in the fall and winter period.
Analysis of Ukraine’s foreign trade
Maxim Urakin also drew attention to the factor of growth of the negative balance of foreign trade, which has been noted since the beginning of the war.
“The country’s negative foreign trade balance continues to grow, reaching $9 billion in the first five months of this year, according to Gosstat estimates. This suggests that Ukraine is spending more currency on importing goods than it earns from exporting them. We see a sharp drop in exports of mineral products by 39.3%, ferrous and non-ferrous metals by 21.4%, wood and wood products by 17.7%, machinery products by 18.2%, chemical industry by 21.4% and other industrial goods by 4.1%,” – said the candidate of economic sciences.
However, not all the news in this sphere was pessimistic. Urakin emphasized the growth of food exports by 9.9%, which indicates the potential of the Ukrainian agro-industrial complex, which will probably become one of the main drivers of the country’s economic recovery in the coming years.
As for the balance of foreign trade in services, although still negative, the pace of its reduction gave some grounds for optimism.
“We see that the deficit of foreign trade in services is shrinking, which may indicate a gradual recovery of some service sectors in Ukraine,” the expert concluded.
Ukraine’s financial situation in 2023
However, equally important aspects of the economy, according to the expert, are government debt, international reserves and inflation.
“The country’s public debt continues to increase its volume. By the middle of 2023 he Ukraine approached the mark of 140 billion dollars. At the same time, the International Monetary Fund (IMF) has adjusted its forecasts on the level of the country’s public debt, reducing it from 98.3% of GDP to 88.1% of GDP. Despite this ‘positive’ realistic revision, this level of debt represents a significant burden for the national economy,” Maxim Urakin said.
The main source of financing of Ukraine’s budget, according to the expert, is still related to foreign aid.
“Half of the budget is financed by taxes and fees, while the rest comes from international grants and loans,” he emphasized.
Nevertheless, the country’s international reserves have shown positive dynamics.
“By August this year, Ukraine’s international reserves reached a record $41.72bn, which is 6.9% higher than the previous record. This increase is probably the result of active external financial support,” the analyst said.
As for inflation, it showed a slowdown. “After a record 27% inflation in 2022, this indicator fell to close to 4% in July this year,” Urakin noted.
Thus, the economic situation in Ukraine, according to the founder of the “Experts Club”, continues to be complex and multifaceted, requiring careful monitoring and adaptation of strategies in response to changing conditions.
World economy in 2023: analysis and forecasts
In the last presented studies of the “Experts Club” the economic situation in Ukraine was actively considered, however, according to Maxim Urakin, the dynamics of the world economy also has a significant impact on our country. According to the latest data, the world economy shows stable signs of growth, but there are also certain risks.
“The IMF has recently provided its forecasts for global economic growth. A growth of 3% is forecast for 2023 and the same is expected in 2024. The decisions taken by the US to resolve issues related to the level of public debt, as well as active actions in the US and Swiss banking sectors, have helped to reduce the immediate risks of a crisis in the global financial market. However, as the IMF emphasized, “the balance of risks remains tilted towards a possible deterioration of the economic situation at the global level,” the economist explained.
Inflation continues to be in the center of experts’ attention. Although the IMF lowered its inflation forecast for the current year to 6.8%, expectations for 2024 were adjusted upward.
Based on this information, Maxim Urakin concludes that the global economy is on the way to stabilization, but the situation remains ambiguous due to a number of uncertain factors. It is important for countries and their economies interacting in the global market to monitor changes and prepare for possible challenges.
Economic development in individual countries
According to the founder of the “Experts Club”, the global economy in 2023 is showing mixed results. While some countries are overcoming the effects of the pandemic and are on the path to stable growth, others are facing challenges from internal and external factors.
“The U.S. economy exceeded expectations, posting above-forecast growth. Meanwhile, consumer spending and government spending also showed solid growth, but residential investment continues to decline. China, which is on the road to recovery from the pandemic, showed strong economic growth, although the construction industry continues to experience a crisis. The Eurozone has shown moderate growth, with the region’s largest economy, Germany, facing recession. At the same time, the UK and Japan have positive adjustments to their GDP forecasts. India continues to strengthen its economic position, showing dynamic growth. Meanwhile, Brazil, although showing growth in the current year, expects a decline by 2024,” summarized the expert.
For more details on the situation in the Ukrainian and global economy, see the video on the YouTube channel “Club of Experts” at the link:
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ECONOMICS, EXPERTS CLUB, MACROECONOMICS, REVIEW_OF_ECONOMICS, URAKIN, WORLD_ECONOMY
The risk of cholera in the south and east of Ukraine is higher than in other regions, says infectious disease doctor Olga Bonkovska.
“There is still a higher risk of cholera outbreaks in the south and east of Ukraine. These regions are the regions with the highest risk of a cholera epidemic,” she said on the air of the analytical center “Experts Club”.
Commenting on the risks of cholera outbreaks after the Kakhovka hydroelectric power station dam was blown up, Bonkovska noted the danger of cholera, in particular, because “cholera starts as a common intestinal infection, and in the initial stages it is impossible to distinguish whether it is cholera or a common intestinal infection.”
“I do not recommend self-medication, because it will help if it is a common intestinal infection, but if it is cholera, there is no way to cure cholera at home,” she said.
The expert reminded that the main manifestation of cholera is dehydration.
“Due to severe dehydration, a person can go into shock with loss of all body functions, kidneys, heart, which can lead to death,” she said.
The infectious disease specialist emphasized that during cholera, “fluid loss becomes so severe that a person simply does not have time to replenish the fluid loss with water.”
“The rate of water excretion from the body exceeds the rate of water absorption during oral rehydration, and medical care in a hospital is needed to replenish water,” she said.
Bonkovska noted that in order to protect oneself from cholera, especially in the regions affected by flooding, it is necessary to drink bottled water or water that has been treated by boiling or using special tablets, wash fresh vegetables and fruits with bottled water or chilled boiled water, wash or disinfect hands with ordinary sanitizers, get rid of the habit of keeping hands in the mouth: take the rule “Hands out of the mouth!” as an axiom.
In addition, the infectious disease specialist recommends not eating with your hands, “as a last resort, keep a sandwich or any other food in a clean napkin,” not eating shrimp or fish without prior heat treatment, and swimming only in those bodies of water where it is allowed.
At the same time, the expert emphasized the inadmissibility of self-medication of acute intestinal infections with antibiotics.
“I don’t advise you to start treating diarrhea at home. It is still better to seek medical help,” she said.
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On Thursday, June 8, Kyiv will host a workshop entitled “First Aid in Case of Injuries and Traumas”. It is intended for media representatives who will be able to master the basic skills of first aid in case of injuries and traumas.
The keynote speaker at the seminar will be Mariana Bolyuk, an anesthesiologist and representative of the Adonis Medical Center Group. She is a co-author of 12 scientific publications and has extensive experience in the field of medicine.
The organizers of the seminar attach great importance to this event and provide an opportunity for journalists to gain the necessary knowledge to provide first aid. Participation in the training will allow journalists to respond more effectively to emergencies and act professionally in case of injuries and traumas.
According to Maksym Urakin, co-organizer of the training, media workers are more often involved in emergencies, so the organizers are trying to hold such events on a regular basis to save lives.
“In total, 61 media representatives have been killed during the conflict. In addition, according to media reports, about 500 journalists have been injured or traumatized to varying degrees since the beginning of the war. With the help of our trainings, we are trying to save lives and health of citizens,” said Maksym Urakin.
The seminar was organized by the Kyiv-based think tank Club of Experts; Adonis, medical partner; Help For Ukraine Charitable Foundation; Pryirpin Community Foundation, general partner; Interfax-Ukraine and Open4Business, general media partners.
EXPERTS CLUB, FIRST_AID, JOURNALISTS, MEDIA, PRYIRPIN COMMUNITY FOUNDATION, URAKIN, АДОНИС
The saturated market of Ukraine and its geographical location make our country an attractive market for foreign goods. However, importing goods to Ukraine is a complex process that requires knowledge of legislation, international relations, and customs clearance procedures. These and other issues were discussed by the founder of the Club of Experts Maxim Urakin and the President of the Ukrainian Exporters Club Yevheniia Lytvynova in a new video on the YouTube channel “Club of Experts”.
According to Maksym Urakin, before starting to import goods, it is necessary to conduct a detailed analysis of the market and legislation of Ukraine and the exporting country, as well as calculate all costs associated with delivery, customs clearance and taxes.
“This will help you draw up a clear action plan and avoid unpleasant situations during the import process,” the expert emphasized.
Yevheniia Lytvynova, President of the Ukrainian Exporters Club, also emphasizes the need to research the market and check the reputation of potential suppliers.
“Market research and checking the reputation of potential partners can help you find a reliable supplier,” she said.
According to Yevheniia Lytvynova, successful import of goods requires a thorough analysis of all aspects of the importer’s future business strategy.
“Before you start importing goods, you need to conduct a detailed analysis of the market, legal requirements and your capabilities, as well as calculate all the costs associated with delivery, customs clearance and taxes. This will help you draw up a clear plan of action and avoid unpleasant situations during the import process,” emphasized Lytvynova.
Regarding the documents to be prepared for importing goods, Lytvynova noted that the contract between the importer and exporter, invoice, transportation document (e.g., waybill or bill of lading), quality certificate and certificate of origin should be put in the forefront.
“In addition to these basic documents, additional documents may be required depending on the characteristics of the goods and the requirements of Ukrainian legislation. In particular, licenses, certificates of conformity, permits and other documents confirming compliance with safety, hygiene, environmental requirements, etc. may be required,” she explained.
Maksym Urakin also emphasized that studying local legislation and choosing a reliable supplier are also very important steps in the import process. According to the experts, in order to successfully sell goods in Ukraine, it is also necessary to take into account the difficulties that may arise after their delivery.
“Even if the goods are of high quality and interesting, they still need to be sold. But here in Ukraine, even after obtaining certificates and relevant permits, sales can be restricted due to various customs barriers, which leads to breach of contract. Therefore, we advise our companies to conduct a detailed analysis of the market and legal requirements. This will allow them to prepare the right documentation and comply with all requirements,” said Yevgeniya Lytvynova.
To increase export sales, experts recommend improving product quality and providing buyers with more information about their goods.
“Nowadays, many buyers check the quality of goods and their compliance with standards. If your products don’t meet the requirements, they simply won’t buy them,” emphasized Maksym Urakin.
In this regard, experts advise to focus on developing the quality of goods and their competitiveness. In addition, according to Maxim Urakin, it is important to participate in international exhibitions and forums where you can find new partners and establish contacts with potential suppliers.
Thus, according to the experts, it is very important to comply with all the requirements and norms set by law when importing goods, conduct a detailed market analysis and check the reputation of suppliers. It is also important to ensure the quality of goods and timely delivery, while considering all possible risks and costs. Importing goods can be a very profitable business if you organize it properly. Experienced experts advise to study the market and determine your capabilities to avoid unpleasant situations and ensure successful business development.
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EXPERTS, EXPERTS CLUB, EXPORT, EXPORTERS CLUB, IMPORT, IMPORT_PRODUCTS, LITVINOVA, URAKIN
The decline in the real gross domestic product (GDP) of Ukraine in the first quarter of 2023 compared to the same period last year will slow down to 19% from 35% and 30.8%, respectively, in the fourth and third quarters of 2022, such is the forecast of the National Bank Ukraine has published the Inflation Report on its website.
The European Bank for Reconstruction and Development (EBRD) has downgraded its forecast for the growth of the Ukrainian economy in 2023 to 1% from 8%, which it expected in September last year, according to the updated Regional Economic Prospects published on Thursday.
Losses in annual GDP growth in 2023 will amount to 1.9 percentage points (p.p.), taking into account the positive effect of 0.5 p.p. due to the use of generators by businesses, and in 2024 losses will decrease to 0.6 p.p. thanks to the gradual recovery of the system, according to the baseline scenario of the macroeconomic forecast of the National Bank of Ukraine (NBU).
The negative balance of Ukraine’s foreign trade in goods in 2022 increased by 2.3 times compared to 2021 – to $11.125 billion from $4.771 billion, the State Statistics Service reported on Tuesday.
The growth of consumer prices in Ukraine in January 2022 accelerated to 0.8% from 0.7% in December and November, which, however, is significantly lower than 2.5% in October and 1.9% in September. According to it, in January last year, inflation was 1.3%, so in annual terms, in January 2023, it decreased to 26% from 26.6%.
As of February 15, foreign aid accounted for 68.8% of the sources of financing the state budget deficit since the beginning of this year, Head of the Verkhovna Rada budget committee Roksolana Pidlasa told Interfax-Ukraine.
The majority of members of the monetary policy committee of the National Bank of Ukraine (NBU) at a meeting on January 25 noted that they consider the base key policy rate forecast to be realistic with it remaining at the level of up to 25% until at least the first quarter of 2024, the NBU website reported.
In January, Ukraine exported 25% less agricultural products through the grain corridor than in December due to the deliberate actions of Russian inspectors to delay vessels in the Bosphorus.
The volume of construction work performed in Ukraine in January-September 2022 decreased by 56.5% compared to the same period in 2021, to UAH 66.3 billion, according to the State Statistics Service of Ukraine.
Economic Monitoring’s Project Manager – PhD in Economics, Maksim Urakin
