The article summarizes 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.
In the first quarter of 2023, Ukraine’s real GDP fell by 10.5% compared to the first quarter of 2022, after falling by 31.4% in the fourth quarter, 30.6% in the third quarter, 36.9% in the second quarter, and 14.9% in the first quarter of last year.
Overall, analysts expect modest GDP growth in Ukraine in 2023. Thus, the World Bank slightly downgraded its forecast for Ukraine’s gross domestic product growth in 2023 to 2% from 3.3%, which it predicted in January 2023. Raiffeisen Bank maintained its forecast of 1.8% growth in Ukraine’s gross domestic product for 2023.
Maksym Urakin, founder of the Kyiv-based think tank Club of Experts, drew attention to key macroeconomic indicators. “Ukraine’s macroeconomic indicators have stabilized, and international reserves due to borrowings are breaking records, but Ukraine’s negative foreign trade balance is having a negative impact on the economy,” said Maksim Urakin.
Inflation in Ukraine will decline to 15.5% in 2023, and real incomes will increase by 1%, according to the updated improved forecast released by the International Monetary Fund (IMF) following the first review of the EFF Extended Fund Facility program.
Ukraine’s total public debt grew by 3.6% and reached a new historical high: in dollar terms, by $4.37 billion to $124.28 billion, and in hryvnia terms, by UAH 159.9 billion to UAH 4 trillion 544.9 billion, according to the Ministry of Finance website.
At the same time, Ukraine’s international reserves as of June 1, 2023, according to preliminary data, amounted to $37 billion 311.3 million, up 4% or $1.358 billion in May, and have updated an 11-year high, the National Bank reported.
Consumer price growth in Ukraine in May 2023 accelerated to 0.5% from 0.2% in April after slowing from 1.5% in March, 0.7% in February and 0.8% in January.
In January-April 2023, Ukraine reduced electricity production by 19.4% (by 8.8 billion kWh) compared to the same period in 2022, to 36.5 billion kWh.
Kiev analytical center “Club of Experts” on its YouTube channel presented another video overview of the macroeconomic situation in Ukraine and in the world.
In the new edition, the founder of the “Club of Experts”, Maksim Urakin, PhD in Economics, noted that since official data on the population of Ukraine is not available now because of the ongoing war, the UN estimates as of June 2023 (43.3 million people) are not completely correct.
“These estimates cannot be sufficiently accurate given the availability of other data sources, such as the Ukrainian Institute for the Future, which in its most recent study estimates the available population at 29 million inhabitants. This reflects a significant population decline of nearly 9 million over the past year, caused by the mass exodus of citizens out of the country after the war began,” Urakin noted.
Despite these challenges, the outlook for Ukraine’s gross domestic product (GDP) can be considered encouraging.
“The GDP decline in the first quarter of 2023 was down from the same period last year at 13.5%. But we foresee an overall positive trend, given the forecast of the NBU, which expects economic recovery starting from the second quarter of 2023,” said the expert.
With the increase in the negative foreign trade balance of Ukraine, it is clear that the country faces new challenges.
“In January-April 2023 the negative balance of foreign trade in goods of Ukraine increased 40 times in comparison with the same period of 2022 – up to $ 7.04 billion. This means that the cost of Ukraine to purchase the necessary goods by $ 7 billion exceeded the income from export of Ukrainian goods, “- said Urakin.
The world economy continues to show strong signs of recovery from the shocks caused by the COVID-19 pandemic. At the same time, GDP growth rates of the leading countries differ markedly.
“In the U.S., the economy is showing moderate growth of 1.3% in the first quarter of 2023, up 0.2% from what was previously reported. In China, meanwhile, GDP grew 2.2% in the first quarter of 2023, more than expected, thanks to a rebound in exports and consumer spending. The volume of China’s digital economy in 2022 also increased significantly – by 10.3% to 50.2 trillion yuan ($7.25 trillion), indicating the increasing role of the digital economy in the country’s overall economic growth,” said Maxim Urakin.
The expert stressed that despite different levels of growth, it is clear that the economies of different countries are still struggling due to the effects of the pandemic and global uncertainty. However, they continue to adapt and strengthen, as evidenced by this latest data.
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The Club of Experts and Maksim Urakin, PhD in Economics, have prepared a summary of the main macroeconomic indicators of Ukraine in the beginning of 2023.
So, the Ministry of Economy of Ukraine revised the macro forecast for 2023, worsening the GDP growth forecast from 3.2% to 1%, primarily because of the assumption that the military operations will not end in the middle of the year, and will last “almost a whole year”, said Deputy Minister Sergei Sobolev.
Ukraine’s real gross domestic product fell 31.4% in the fourth quarter of 2022 compared to the fourth quarter of 2021 after falling 30.8% in the third quarter, 37.2% in the second and 15.1% in the first, the State Statistics Service said Monday. At the same time, according to the consensus forecast of eight companies and non-governmental institutions, which was released by the Center for Economic Strategy, the real gross domestic product of Ukraine in 2023 will decline by 0.1%, with estimates ranging from a decline of 4.6% to growth of 5.5%. The economic recovery will be barely visible this year, expected to moderate GDP growth of 2%, which will bring real GDP at the end of this year at 70-72% of prewar 2021, such macroeconomic forecast published by ICU investment group.
According to deputy governor of the NBU Serhiy Mykolaychuk, the economic situation in Ukraine in the first quarter of 2023 is developing much better than the National Bank of Ukraine (NBU) expected in its January forecast, especially in the energy supply, so it is highly probable that the central bank will improve its current GDP growth forecast for this year by 0.3% at the end of April. Meanwhile, the International Monetary Fund forecasts the dynamics of the Ukrainian economy this year from 3% decline to 1% growth followed by 3.2% growth in 2024 and 6.5% growth in 2025.
And the International Monetary Fund (IMF), which previously estimated the dynamics of the Ukrainian economy this year from 3% decline to 1% growth, is inclined to the fact that GDP growth in 2023 may be at the upper limit of this range.
Ukraine’s GDP, after falling by 29.2% last year, will grow by 0.5% this year and by 3.5% next year, predicts the World Bank, which in January this year expected more rapid growth: by 3.3% in 2023 and by 4.1% in 2024.
At the same time, the real gross domestic product of Ukraine after growing by 3.4% in 2021 in 2022 due to full-scale Russian military aggression fell by 29.1%, and the negative balance of Ukraine’s foreign trade in goods in January-February 2023 increased 3.4 times compared to the same period in 2022 – to $3.713 billion from $1.083 billion.
The state budget deficit of Ukraine in February 2023 increased to 88.8 billion UAH from 72.3 billion UAH in January, including the general fund deficit to 93.2 billion UAH from 78.9 billion UAH.
The aggregate state debt of Ukraine in February decreased by 0.5%: in dollar terms by $0.59 billion – to $116.01 billion, in UAH terms – by UAH 21.62 billion, to UAH 4.24 trillion.
At the same time, at the end of January 2023, Ukraine’s consolidated balance of payments was $1.2 billion in surplus, while in January 2022 the deficit was $1.8 billion.
International reserves of Ukraine as of March 1, 2023, according to preliminary data, amounted to $28.865 billion, which is 3.5%, or $1.064 billion, less than in January 2023 due to interventions of the National Bank to sell currency to cover the difference between supply and demand in the foreign exchange market.
The growth of consumer prices in Ukraine in February 2023 slowed to 0.7% from 0.8% in January, returning to the level of December last year.
A new video dedicated to the situation in the Ukrainian and world economy at the beginning of 2023 has been published on the YouTube channel of the “Club of Experts” analytical center. The official data concerning the main macroeconomic indicators was presented in the program as well as the forecasts of the leading world analytics for the years 2023-2024 were consolidated.
According to the analysts, the indicators of Ukrainian economy are stable on the whole. Thus to support it in the conditions of war in 2023 the increase of volumes of macrofinancial help from partners will be required. Thus, the founder of the Club of Experts, candidate of economic sciences Maxim Urakin referred to the IMF assessment, according to which Ukraine’s needs for external financing in the current year will be not less than 39.5 billion dollars and can reach 57 billion.
“This forecast is an expression of a high degree of uncertainty on the part of the world’s leading financial institutions with regard to the situation in the Ukrainian economy, and also demonstrates the increasing pressure on it from expenditures,” the expert stressed.
As for the global indicators, the same IMF forecasts that more than a third of the global economy in 2023 will arrive in recession. In turn, Bloomberg notes a record fall in global stock and bond markets in the last months of 2022. At the same time, investors are more optimistic about this year’s prospects.
“The end of the cycle of interest rate hikes, the recovery of the Chinese economy and the end of the war in Ukraine followed by the recovery of our economy could significantly improve the situation both in our country and in the world,” said Maxim Urakin.
For more details on the situation in Ukraine and the world economy, please watch the video on the “Club of Experts” channel by clicking here:
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In its new video, the Expert Club YouTube channel reviewed the macroeconomic situation in Ukraine in the 6th month of the war, and also analyzed the July IMF report on the global economic outlook in 2022 and 2023.
As we wrote earlier, the state authorities of Ukraine have temporarily suspended the publication of most statistical information for the period of martial law and for three months from the moment it ends. The exception is the publication of data on the consumer price index, separate information on indicators of foreign trade in goods, etc.
Thus, from the data published by the State Employment Center, it follows that the number of registered unemployed in Ukraine is approximately at the level of last year, while the number of available vacancies has sharply decreased.
This, according to the founder of the Club of Experts Maksim Urakin, has led to the fact that now about 12-13 unemployed people apply for one vacancy.
“The estimate of the unemployment rate by the National Bank in the second quarter of 2022 is 35% according to the methodology of the International Labor Organization,” Maksim Urakin added.
In addition, according to Urakin, the current forecast for Ukraine’s GDP growth in 2023-2024, published by the National Bank, is based primarily on expectations of an increase in international support for Ukraine and the implementation of programs to restore war-damaged infrastructure.
On the situation in the global economy, the Club of Experts analyzed the report of the International Monetary Fund, published in July. In particular, there is a possible recession in the US economy. a slowdown in GDP growth in China and India, as well as a deterioration in the situation in the euro area, provoked by rising energy prices.
See this and much more in a new video on the YouTube channel “Experts Club” at the link:
CLUB OF EXPERTS, ECONOMIC_UKRAINE, MACROECONOMICS, STATISTICS, URAKIN, ВІДЕО
The Experts Club continues a series of programs dedicated to the macroeconomics of Ukraine. The new issue analyzes the preliminary results of 2021.
“We create such analytical videos in order to increase the level of knowledge of the population in the field of economics and for easy visualization of a huge number of figures. Such content, of course, is not a “mass market,” but we do not strive for it either. We focus on a thinking and searching audience,” founder of the Experts Club project Maksim Urakin said.
The issue analyzes the change in the number of the population of Ukraine, the current unemployment rates, presents the labor market in the regional context. In addition, GDP indicators are given, the main trade partners of the country are named, trends and plans for the payment of Ukraine’s internal and external debt, as well as indicators of retail and inflation, are analyzed.
The video contains a large number of author’s charts, histograms, which conveniently illustrate the main macroeconomic trends.
The Experts Club is dedicated to political science, economics, science, futurology, contains expert opinions and analysis of the topics discussed.
This video is available for viewing at the link
https://www.youtube.com/watch?v=gUs6fF–F-c
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