Ukraine’s real gross domestic product (GDP) growth for January-March 2024 amounted to 4.5% (+/- 1%) from 3.6% (+/- 1%) at the end of January-February.
Growth accelerated to 4.6% (+/- 1%) in March from 3.9% (+/- 1%) in February and 3.5% (+/- 1%) in January this year, according to an estimate released on the website of the Ministry of Economy of Ukraine.
“In March 2024, the trend of recovery growth continued, supported by the stable operation of the Ukrainian maritime corridor (stimulated activity in rail transport, metallurgy and metal ore mining), increased production capacity in the extractive industry, intensified production of mineral fertilizers, increased demand for construction materials, taking place against the backdrop of improved business sentiment … and revival of consumer activity …,” the Ministry of Economy pointed out.
The Ministry added that in March, almost all aggregated economic activities formed a positive contribution to the total GDP. Thus, exports of products of agricultural production and mining and metallurgical complex were provided by the Ukrainian Sea Corridor; and investment demand generated by the budget, as well as the increase in production capacity in the extractive industry formed a positive contribution of production types.
At the same time, it is pointed out that the dynamics of electricity production slowed down significantly in the context of significant rocket attacks in late March, which led to serious damage to energy infrastructure and will require a significant period of time and resources to restore it.
As reported, the National Bank of Ukraine on April 25 worsened its forecast for the country’s GDP growth this year from 3.6% to 3% after 5.3% last year.
When approving the draft state budget for the second reading in early November 2023, the government forecasted GDP growth of 4.6% this year.
Earlier Experts Club analytical center and Maxim Urakin released a video analysis of how the GDP of the world’s countries has changed in recent years, more detailed video analysis is available here – https://youtu.be/w5fF_GYyrIc?si=BsZmIUERHSBJrO_3 Subscribe to Experts Club youtube channel here – https://www.youtube.com/@ExpertsClub
EXPERTS CLUB, GDP, MACROECONOMICS, MINISTRY OF ECONOMY, UKRAINE, УРАКІНА
The National Bank of Ukraine has raised its forecast of international reserves to $43.4 billion at the end of this year from $40.4 billion and to $44.3 billion at the end of next year from $42.1 billion.
“Compared to the previous forecast, the risk of insufficient international financing this year has significantly weakened, but the risks of rhythmicity of its receipt remain,” the NBU said in a press release on Thursday.
The central bank reminded that in March, about $9 billion was received from international partners, which allowed to increase international reserves to almost $44 billion.
In addition, in recent days, Ukraine has received positive news from the United States about the approval of a military and financial assistance package, and another tranche of EUR 1.5 billion has been received from the EU.
“In view of this, Ukraine can count on $38 billion of external budgetary assistance this year,” the NBU said.
According to its updated forecast, the estimate of the current account deficit this year has been downgraded from $16.9 billion to $20.2 billion, but next year it has been improved from $19.8 billion to $18.2 billion.
For more details on macroeconomic indicators of Ukraine and the world, GDP of major countries and other economic topics, please see one of the video analyzes of the Experts club think tank – https://youtu.be/w5fF_GYyrIc?si=Ymo-FlMFNGfLLdK-
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EXPERTS CLUB, GDP, international reserve, MACROECONOMICS, NATIONAL BANK
The number of registered unemployed people increased by 7.9% to 118.5 thousand in March, mainly due to the increase in the number of unemployed women for the fourth month in a row, including last month – by 7.6 thousand to 91.9 thousand.
According to the data of the National Bank of Ukraine (NBU), released on Friday, the number of unemployed also increased among people under 35 years old – by 2.3 thousand, up to 27.1 thousand.
It is specified that such a trend has lasted since January 2024.
As in the previous month, the largest number of unemployed citizens was recorded in the following regions: Zaporizhzhya (8.9 thousand), Kharkiv (8.6 thousand), Dnipropetrovsk (8.4 thousand), Sumy (7.3 thousand) and Poltava (6.4 thousand).
According to the central bank, the number of unemployed receiving benefits increased from 46.6 thousand to 51.2 thousand, while the number of vacancies also increased to 44.5 thousand from 41 thousand in February.
More details on macroeconomic indicators of Ukraine and the world, GDP of major countries and other economic topics were discussed in one of the video analysis of Experts club analytical center – https://youtu.be/w5fF_GYyrIc?si=Ymo-FlMFNGfLLdK-.
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The International Monetary Fund (IMF) has clarified the forecast of Ukraine’s GDP growth in 2024 under the World Economic Outlook (WEO): it expects it at the level of 3.2%, then during the third revision of the EFF Extended Fund Facility program in March estimated it in the range of 3-4%.
According to a publication on the Fund’s website on Tuesday, the economic growth forecast for 2025 was kept at 6.5%, up from 5.3% in 2023, according to the State Statistics Service.
The IMF also expects average annual inflation to slow to 6.4% this year from 12.9% last year and accelerate slightly to 7.6% in 2025.
Ukraine’s current account deficit forecast for this year and next year has been kept at the same level as in the third revision of the EFF program – 5.7% of GDP and 8.2% of GDP after 5.5% of GDP last year.
The Fund also reiterated expectations for unemployment to fall from 19.1% last year to 14.5% this year and 13.8% next year/
The IMF indicated that it forecast growth in the euro zone to accelerate to 0.8% this year and 1.5% next year after 0.4% last year, driven by the strong impact of Russia’s war against Ukraine.
“Stronger household consumption as the impact of the energy price shock fades and lower inflation supports real income growth is expected to support the recovery,” the Fund said, clarifying that the updated estimate is 0.1-0.2 percentage points (p.p.) worse than the previous estimate made in January.
Overall, the WEO said global economic growth, estimated at 3.2% in 2023, will continue at the same pace in 2024 and 2025. The forecast for 2024 is revised upward by 0.1pc from the January estimate.
“These growth rates are low by historical standards, driven by both short-term factors, such as continued high borrowing costs and the withdrawal of fiscal support, and the longer-term effects of the COVID-19 pandemic and Russia’s invasion of Ukraine, weak productivity growth, and increased geoeconomic fragmentation,” the IMF said.
Overall global inflation is expected to decline from an annual average of 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025, with advanced economies returning to their inflation targets sooner than emerging market and developing countries.
The report also notes that the forecast for global economic growth in five years’ time (at 3.1%) is the lowest in decades. ” An alarming change is the widening gap between many low-income countries and the rest of the world. The growth forecast for these economies has been revised downward and the inflation forecast has been raised,” the Fund states.
Worse still, the report notes that compared to most other regions, estimates of long-term damage for low-income developing countries, including some large countries, are revised upward, indicating that the poorest countries are still unable to recover from the pandemic and cost-of-living crisis.
Its experts attribute the relatively weak medium-term outlook to lower GDP per capita growth, due in part to persistent structural frictions preventing the movement of capital and labor to productive firms. And worsening growth prospects in China and other large emerging market economies, given their growing share in the global economy, will have a negative impact on the development prospects of their trading partners.
According to the IMF, the risks to the global economic outlook are currently balanced. “On the downside, new price spikes triggered by geopolitical tensions, including from the war in Ukraine and the conflict in Gaza and Israel, could, along with the resilience of core inflation while labor markets remain tight, lead to higher interest rate expectations and lower asset prices,” the WEO pointed out.
The fund added that geo-economic fragmentation could intensify, with higher barriers to the flow of goods, capital and people implying slower economic growth due to lower supply.
At the same time, it noted that artificial intelligence and stronger structural reforms than expected could boost productivity growth.
As the global economy approaches a soft landing, the priority for central banks in the short term is to ensure that inflation falls smoothly, avoiding both premature policy easing and excessive delay leading to lagging behind targets, the IMF also said.
“Multilateral cooperation is needed to limit the costs and risks associated with geoeconomic fragmentation and climate change, accelerate the transition to green energy, and facilitate debt restructuring,” the Fund concluded.
More details on macroeconomic indicators of Ukraine and the world, GDP of major countries and other economic topics were discussed in one of the video analysis of Experts club analytical center – https://youtu.be/w5fF_GYyrIc?si=Ymo-FlMFNGfLLdK-.
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EXPERTS CLUB, GDP GROWTH, IMF, MACROECONOMICS, UKRAINE, URAKIN
The Estonian Ministry of Finance expects zero growth of the country’s economy at the end of the current year.
According to the forecast published by the Ministry, the reduction in external demand in the second half of last year was stronger than expected, and the expected turn to economic recovery did not take place. This will have the consequence of the lack of growth in the current year.
The Ministry of Economy notes that last year, the exchange of goods contracted globally, driven by the cooling of the Chinese economy and geopolitical tensions. In developed countries and Europe, this was compounded by the rapid rise in interest rates, which was launched to curb inflation, and the deterioration in capital- and energy-intensive activities due to the energy crisis.
Nevertheless, according to the Ministry’s assessment, the factors restraining the development of the Estonian economy have been receding in recent years: price growth has slowed down, wage growth has continued, interest rates have gradually decreased, and there is no high unemployment.
The Estonian Ministry of Finance prepares a financial and economic forecast twice a year, in spring and summer.
Estonia’s GDP in 2023 has decreased by 3.1%. At the end of March 2024, the Bank of Estonia gave a forecast that the country’s GDP decline would slow down to “minus” 0.6% this year and the economy would grow by 3.2% in 2025.
Earlier Experts Club think tank and Maxim Urakin released a video analysis of how the GDP of the world’s largest economies has changed over the past decades, more video analysis is available here –
https://youtu.be/w5fF_GYyrIc?si=BsZmIUERHSBJrO_3
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ECONOMIC GROWTH, ESTONIA, EXPERTS CLUB, GDP, MACROECONOMICS, MINISTRY OF FINANCE, URAKIN
Ukraine’s international reserves in March, according to preliminary estimates of the National Bank of Ukraine (NBU), increased by 18%, or $6.7 billion – to $43 billion 762.7 million.
“Such dynamics is due to significant (more than $9 billion) volumes of receipts from international partners, which exceeded the net sale of currency by the National Bank and the country’s debt payments in foreign currency,” the NBU website explained on Friday.
In addition, the National Bank noted that $9.32 billion was transferred to foreign currency accounts of the Cabinet of Ministers in March, while $363.5 million was paid for servicing and repayment of the state debt.
As the regulator noted, Ukraine also paid $728.5m to the International Monetary Fund.
Among other factors determining the volume of reserves, the NBU named operations on the foreign exchange market: in March, the regulator’s net sale of foreign currency amounted to $1.79bn, which is 18.5% more than in the previous month.
According to balance sheet data, the NBU sold $1.81 bln on the foreign exchange market and bought $25.9 mln in reserves.
The central bank also indicated that the current volume of reserves was positively affected by the revaluation of the value of financial instruments, adding $266.3 million.
“The current volume of international reserves provides funding for 5.8 months of future imports,” the regulator stated.
As reported, the NBU in January reduced the forecast of Ukraine’s international reserves at the end of 2024 to $40.4 billion from $44.7 billion and to $42.1 billion from $45 billion at the end of 2025. Earlier, Experts Club analytical center and Maxim Urakin released a video analysis of how the GDP of the world’s countries has changed in recent years, more detailed video analysis is available here – https://youtu.be/w5fF_GYyrIc?si=BsZmIUERHSBJrO_3 Subscribe to Experts Club YouTube channel here – https://www.youtube.com/@ExpertsClub
EXPERTS CLUB, GDP, International reserves of Ukraine, MACROECONOMICS, NATIONAL BANK OF UKRAINE, NBU, URAKIN
