Business news from Ukraine

Overview of main economic indicators of Ukraine at end of 2023 by Experts club

The article collects 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, as well as 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
Director of the Ptukha Institute of Demography and Social Studies of the National Academy of Sciences of Ukraine, Academician Ella Libanova, predicts that about 50% of citizens will return to Ukraine after the war ends. At the same time, Libanova believes that if the economy is restored to pre-war levels, Ukraine will not be able to return the projected 4.5 million citizens.
She also drew attention to the fact that, according to Eurostat, there are currently 4.2 million Ukrainian military migrants in the European Union.
Earlier, Libanova described depopulation and labor shortages as an inevitable scenario for Ukraine.
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.

Economic recovery
Ukraine’s real gross domestic product (GDP) growth slowed to 8.2% in the third quarter of 2023 compared to the same period last year.
The NBU, which has raised its overall GDP growth forecast for this year to 4.9%, estimates the direct positive contribution of a higher harvest at 1.3 percentage points.
“At the same time, the key risk for our economy remains a 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,” said Maksym Urakin.

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-September 2023 increased by 3.2 times compared to the same period in 2022 – $19.402 billion. This means that the cost of purchasing the goods Ukraine needs is almost $20 billion more than the income from exporting Ukrainian goods to other countries,” said Urakin, PhD in Economics.

Ukraine’s financial situation in 2023
According to the expert, the main factors characterizing the state of the Ukrainian economy are public debt, international reserves, and inflation.
“As of September 30, 2023, Ukraine’s public and publicly guaranteed debt amounted to UAH 4,886.13 billion, or USD 133.62 billion. This is a slight decrease compared to the historical maximum set in August,” Maksym Urakin said.

The expert noted that the main risks to the economy remain the duration of the war and the instability of international aid.
“In the third quarter of 2023, Ukraine’s GDP growth slowed to 8.2%. The negative balance of foreign trade increased 3.2 times, which is an alarming signal. The public debt has slightly decreased compared to August figures, but in 2024 it may exceed the country’s GDP for the first time, which poses significant risks to economic stability,” the economist said.

Thus, the economic situation in Ukraine, according to the founder of the Club of Experts, continues to require close monitoring and adaptation of strategies in response to changing conditions. Macroeconomic indicators of Ukraine and the world were discussed in more detail in one of the video programs of the Experts club

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Impact of electricity deficit on real GDP vs no deficit, % (forecast up to 2024)

Impact of electricity deficit on real GDP vs no deficit, % (forecast up to 2024)

Source: and

Dragon Capital raises iforecast for GDP growth in 2023

Dragon Capital investment company, taking into account the increase in exports of raw materials through the sea corridor, a stable energy situation and a good harvest, improved its forecast for economic growth in 2023 from 4.5% to 5.2%, but kept it at 4% for 2024, the company said in a press release on Friday.
“Our updated estimate is that real GDP will grow 5.0% year-over-year in the fourth quarter of 2023, from the 3.0% we previously estimated,” the company said in a statement.
Its analysts estimate that Ukraine exported about 4 million tonnes of commodities through the new sea corridor in November, from 2 million tonnes in October. At the same time, agricultural goods accounted for about 60-70%, and the remaining share was occupied by the export of iron ore and steel. This dynamics contributes to the revitalization of related sectors, in particular freight transportation and trade, contributes to the recovery of ore production and metallurgy products, and also improves the financial indicators of agricultural enterprises, reducing risks to the harvest in 2024.
Dragon Capital, taking into account the latest data on yields of major agricultural crops, has improved its expectations for the harvest of grains and oilseeds this year from 77 million tonnes to 80 million tonnes (11% more year-over-year).
At the same time, the investment company said that an unexpected and unfavorable event was the blockade of the main crossing points of the Ukrainian-Polish border by Polish truckers in early November, which will have a limited adverse impact on economic activity.
Among the downsides of the blockade of the Ukrainian-Polish border are a decrease in state budget receipts, losses for manufacturers oriented towards the EU market, mainly in the food industry, woodworking and production of automotive electronics, a shortage of certain energy materials such as LPG, a delay in volunteer assistance for the front and financial losses of enterprises due to queues.
At the same time, Dragon Capital said, since the import of goods from the EU to Ukraine by road exceeds exports by $1.1 billion per month, the blockade leads to a reduction in the foreign trade deficit, which in recent months has fluctuated in the range of $2.8-3.0 billion per month.
“Due to the reduction in imports, some Ukrainian manufacturers of consumer goods are gaining a temporary competitive advantage,” the company added.
Speaking about the 4% forecast for economic growth next year, Dragon Capital named the partial restoration of exports by seaports as one of its key drivers and, accordingly, an increase in production in related sectors (ore mining, metallurgy, freight transportation, domestic trade). “The development of the domestic defense industry would also contribute to the economy,” the company said.
At the same time, the investment company said that economic recovery in 2023-2024 will not compensate for the 29% decline in 2022 caused by the consequences of the full-scale Russian invasion of Ukraine, and real GDP in 2024 will remain 22% below its pre-war level.
“At the same time, nominal GDP in U.S. dollars could reach its pre-war level of $200 billion as early as next year due to relative exchange rate stability and high average annual inflation,” Dragon Capital said in the press release.
The company maintained its inflation forecast for this and next years at 6% and 8%, respectively, with the National Bank’s key policy rate unchanged at 15% after its expected reduction from 16% at the next meeting on December 14.
Dragon Capital also noted the importance of financial assistance from partners, pointing out that if there is a shortage, the government will have to turn to monetization of the budget deficit, which will decrease next year from 25% of GDP to 21% of GDP, or to increase the tax burden.
“We expect international partners to approve new economic support packages for Ukraine and provide about $40 billion in direct budget funding in 2024, although a delay in the release of funds is possible early next year,” the company said.
The company’s analysts expect that, subject to such external revenues, the National Bank’s gold and foreign exchange reserves will begin to gradually grow and reach $45 billion by the end of the year.
Dragon Capital kept its exchange rate expectations unchanged – UAH 37.30/$1 on average for 2024 and UAH 39.00/$1 at the end of the year.


Real GDP percentage changes over previous period in 2014-2023

Real GDP percentage changes over previous period in 2014-2023

Source: and

Ukraine’s external gross debt rose to 92.7% of GDP – NBU

The volume of Ukraine’s gross external debt increased by $8.8bn during the second quarter of this year and amounted to $148.6bn at the end of the half-year, according to the website of the National Bank of Ukraine (NBU).
“Relative to GDP, the debt increased from 90.5% to 92.7%,” the National Bank noted.

At the same time, the external debt of the public sector for the second quarter of 2023 increased by $8.4 billion to – $84.5 billion (52.7% of GDP), while the debt of the private sector – by $0.4 billion to $64.1 billion (40% of GDP).

As indicated by the National Bank, the growth in the public sector was due to net attraction of $8.8 billion in loans from international partners, including $3.6 billion from the International Monetary Fund (IMF), while the government debt on securities decreased by $0.12 billion.

According to the central bank, the volume of external liabilities of Ukrainian banks decreased by $0.08bn to $1.8bn (1.1% of GDP), mainly due to the reduction of debt on loans by a similar amount.
External debt of other sectors of the economy increased by $0.2bn to $41.3bn (25.8% of GDP). As explained by the regulator, this was due to the growth of external debt on guaranteed loans – by $0.14 billion and securities – by $0.05 billion.
Debt of other sectors of the economy, including intercompany debt, increased by $0.52 billion to $62.3 billion (38.9% of GDP) in the reporting quarter.

Direct intercompany debt of enterprises in direct investment relations increased by $0.28 billion to $21 billion (13.1% of GDP) in the quarter due to the increase in external debt on credits and loans of direct investors by $0.26 billion.

The NBU estimated the increase in private sector debt due to exchange rate changes at $0.4 bln.
The volume of overdue debt of the real sector on non-guaranteed loans (including from direct investors) increased by $0.13bn in April-June and amounted to $25.4bn (15.9% of GDP) at the end of the second quarter. According to the NBU, the share of Cyprus in it is 58.1%. In addition, the shares of the UK increased by 1 percentage point (p.p.), to 9.2%, and the Netherlands – by 3 p.p., to 5.8%.

According to the National Bank, Cyprus at the end of the second quarter remained the main creditor country in terms of the geographical structure of private sector debt on non-guaranteed loans (together with intercompany debt) – 49.2% of the total volume, its share since the beginning of the year increased by 0.4 p.p.

The shares of the Netherlands, Germany and Switzerland increased by 0.1 pp. to 7.3%, 3.0% and 2.6% respectively, while the share of the USA remained at 3.0% and the shares of the UK and Luxembourg decreased by 0.1 pp. – to 10.7%.

The main currency of Ukraine’s external borrowings at the end of Q2 2023 remains the US dollar – 50% of total external debt, but its share decreased by 3 p.p. over the quarter. At the same time, the share of borrowings in euros increased from 31.9% to 33.8%, as well as in SDRs to the IMF – from 9.9% to 11.4%, while the share of external debt in hryvnia decreased by 0.2 p.p. to 1.6%. – to 1.6%.
The volume of short-term external debt by residual maturity for the second quarter of 2023 increased by $1.2 billion and amounted to $40.8 billion as of June 30, 2023.

Meanwhile, general government liabilities that require repayment over the next 12 months increased by $0.9 billion to $3.8 billion due to higher future government loan repayments, including $0.2 billion to the IMF, while central bank repayments decreased by $0.18 billion to $1.3 billion due to lower IMF repayments.
The volume of short-term liabilities of the banking sector remained almost at the level of the previous quarter and amounted to $1.3 bln.

The total volume of real sector borrowings (together with intercompany debt), which are to be repaid over the next 12 months, increased by $0.5bn and amounted to $34.4bn as of June 30, 2023. The National Bank specified that the growth is due to an increase in the volume of future repayments on debt securities by $0.4bn.

Experts Club research project and Maxim Urakin recently released an analytical video about the economy of Ukraine and the world.

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Economy Ministry forecasts acceleration of Ukraine’s GDP growth to 5%

The gross domestic product (GDP) of Ukraine after a decrease in the first quarter of 2023 by 10.5% against the first quarter of 2022 in the second and third quarters switched to growth, is indicated in the explanatory note to the government’s draft state budget for 2024.

“According to estimates of the Ministry of Economy, at the end of eight months, growth is 3%,” the document says.

According to it, “certain types of economic activities” managed to quickly adapt to the consequences of the destruction of the dam of the Kakhovskaya HPP.

“Better than expected results of economic activity are due to the rapid adaptation of enterprises to the new conditions of activity together with the recovery of domestic demand, which was the traditional driver of growth of the Ukrainian economy in previous years,” – noted in the explanatory note.

First Deputy Prime Minister and Minister of Economy Yulia Sviridenko announced last week that the forecast for GDP growth in 2023 had been raised to 4%, but the explanatory note still says that the economy will grow by 2.8% this year with inflation at 14.7%, although it fell to 8.6% in August.

According to the explanatory note, the Ministry of Economy as of mid-June this year predicted GDP growth next year by 5% with inflation falling to 10.8% at the end of the year.

The National Bank of Ukraine in late July raised its forecast for Ukraine’s GDP growth in 2023 from 2% to 2.9%, but lowered it for 2024 from 4.3% to 3.5%. In addition, the NBU improved its inflation estimate this year from 14.8% to 10.6%, and next year – to 8.5%.
Experts Club Research Project and Maxim Urakin recently released an analytical video about the economy of Ukraine and the world.

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