Ukraine’s GDP grew 3.4% in 2021 after falling 3.8% in 2020, the State Statistics Service said.
Nominal GDP was UAH 5.46 trillion and per capita GDP was UAH 131,940.
GDP was $200.09 billion at an average exchange rate of UAH 27.29/$1, and per capita GDP was $4,840.
The Q4 2021 GDP growth estimate was raised to 6.1% from the 5.9% given at the start of February.
The Statistics Service raised its Q2 and Q3 2021 estimates for the second time, to 6% from 5.7% and to 2.8% from 2.7%, respectively, the initial estimates being 5.4% and 2.4%. GDP fell 2.2% in Q1 2021.
Head of Dragon Capital Tomas Fiala predicts the growth of Ukraine’s gross domestic product (GDP) by 3% in 2022.
“Our forecast for GDP growth in 2022 remains unchanged, we expect growth at the level of 3%,” he said during the European Business Association (EBA) “Global Outlook: Reality Check” conference.
According to him, the exchange rate of the national currency during the year will be at the level of UAH 29-30/$1. At the same time, the hryvnia exchange rate will be stable in the first half of the year, while its volatility may begin in the second half of the year, since Ukraine will have to import a significant amount of energy resources.
The head of Dragon Capital added that currently his company continues to invest.
“We continue to invest in our investment projects, we continue to build industrial parks in Kyiv and Lviv,” Fiala said.
Analysts from Morgan Stanley have maintained an estimate of Ukraine’s GDP growth in 2021 at 3.4%, and 4.2% in 2022, according to the forecast materials available to the Interfax-Ukraine agency.
According to the forecast, inflation in Ukraine will decrease to 9.5% by the end of 2021 and to 5.7% by the end of 2022.
Morgan Stanley experts also forecast a current account deficit of 0.5% of GDP in 2021 and 2.5% in 2022.
They expect that the International Monetary Fund’s Stand-By Arrangement is likely to be extended by six months – until the end of June 2022.
The growth of the gross domestic product (GDP) of Ukraine in January-August 2021 accelerated to 2.9% compared to 2.1% in January-July 2021, the Ministry of Economy has said.
“In January-August 2021, according to the calculations of the Ministry of Economy, the composite production index (CIP) grew by 2.1% (by 1.3% in January-July 2021, a fall of 5.8% in January-August 2020), GDP – by 2.9% (2.1% in January-July 2021, a fall of 5.7% in January-August 2020),” the ministry said in the August survey of economic activity published on Monday.
As the ministry said, in August 2021, an increase in production volumes was demonstrated by almost all types of economic activity, except for wholesale trade, which was supported by a high price level on global commodity markets, an active increase in agricultural production, and optimistic business sentiments amid the “green” level of epidemic danger throughout territory of the country.
“The existing recovery growth does not allow us to speak of a full-fledged post-crisis economic recovery, this requires more time. In addition, the internal economic recovery is also influenced by global changes and risks,” the Economy Ministry said.
Among the pressure factors is the aggravation of political and economic relations between individual countries, Russia’s abuse of a dominant position in the gas market and a sharp rise in gas prices, as well as the spread of a new wave of a mutated strain of coronavirus in the world.
As reported, in 2020, the Ukrainian economy fell by 4%. This year, the Ministry of Economy and the government expect growth by 4.1%, and the National Bank – by 3.8%.
The share of insurance in Ukraine’s GDP is very low and has a downward trend: since 2014 and as of June 30, 2021, it has decreased from 1.69% to 1.14% (by 32.5%), Director General of the Insurance Business Association Viacheslav Cherniakhovsky said at the XXI International Financial Forum in Odesa.
“We have not yet reached the indicators of the first half of 2017 in premiums if we count the market size adjusted for inflation. Achieving the level of penetration of 2% of GDP, laid down in the updated Financial Sector Development Strategy of Ukraine until 2025 year seems unlikely by the end of 2024, especially if there are no changes in the taxation of enterprises when they conclude long-term life insurance contracts for their employees,” he said.
Speaking about the steps that would contribute to the development of the market, Cherniakhovsky noted the inadmissibility of such practices as the accreditation of insurers by banks. “Not a single legislative document contains any accreditations. This is an anachronism and remnants of monopoly. On the contrary, there is a provision of the law on insurance, according to which the consumer has the right to choose an insurer, and it is forbidden to impose the conclusion of an insurance contract within the framework of other legal relations. Banks can only nominate requirements for the structure of the insurance product provided by the insurance company – definitions of insurance amounts, a list of risks, the size of the franchise, the terms of payment and cases of refusal in it,” he said.
Cherniakhovsky said that the National Bank of Ukraine (NBU), as a general regulator for the banking and insurance market, should stop this practice. “This is necessary for all consumers who receive loans now, next month, and not sometime in the future. The practice is unacceptable when banks oblige insurance companies to double prices for owners of collateralized property to receive not only interest on the loan, but and a commission of 50% of insurance payments,” he said.
According to the expert, what they are now trying to consolidate with the new law on the specifics of insurance of agricultural products with state support, in fact, is also a kind of “accreditation”. This approach is unacceptable, since any company that has received the appropriate license has the right to operate in the market for this type of insurance, he said.
The President’s Office estimates the growth of Ukraine’s GDP in 2021 at 3.8%, Deputy Head of the President’s Office Yulia Svyrydenko has said.
“We expect that a full-fledged economic recovery will take place during this and subsequent years. This year we forecast the growth [of GDP] at the level of 3.8%,” she told Interfax-Ukraine.
Svyrydenko said that currently there is a recovery in private consumption and external demand.
“Farmers are harvesting record harvests, which will also help the economy grow. At the same time, the growth potential today depends on the rate of vaccination, and the spread of new strains of coronavirus may be a risk,” she said.
As reported, the Ministry of Economy confirmed its growth forecast in 2021 at 4.1%, and the National Bank expects the GDP growth this year at 3.8%.
