The Ministry of Economy has raised its forecast for Ukraine’s gross domestic product (GDP) growth in 2023 to 4%, First Deputy Prime Minister and Minister of Economy Yulia Svyrydenko said in Kyiv on Saturday at the annual meeting of the Yalta European Strategy organized by the Victor Pinchuk Foundation.
“This year, we believe that GDP growth will be 4%, although pessimists believe that 3%… We have maintained macro stability, this is the basis for further recovery of Ukraine,” she said.
Svyrydenko clarified to Interfax-Ukraine that the government has not yet approved the forecast for 2024, while the National Bank of Ukraine expects GDP growth of 3.5%, and up to 6.8% in 2025.
“We are always more optimistic than the National Bank,” the First Deputy Prime Minister and Minister of Economy said.
She added that inflation, according to the NBU’s forecast, will slow to 10.6% this year, and core inflation to 9%.
In her speech, the First Vice Prime Minister also reminded that the NBU had recently cut the discount rate to 22% per annum.
“As a participant in this discussion, I will say that I was in favor of a bigger reduction. I think that our macroeconomic situation allows us to be more flexible, but, as always, realistic,” Svyrydenko said.
According to her, the Ministry of Economy sees improvements in the agricultural sector and expects that in November a working instrument for military insurance will be created through the efforts of both the Ukrainian government and the European Bank for Reconstruction and Development (EBRD).
The First Deputy Prime Minister emphasized that the government is also actively working on a four-year development plan under the Ukraine Facility program announced by the EU, which will start operating in early 2024 and will become the basis for further growth of its economy.
As reported, in June, the Ministry of Economy slightly downgraded its GDP forecast for this year from 3.2% to 2.8% due to the destruction of the Kakhovka hydroelectric power plant and pessimistic expectations for the upcoming harvest. According to Natalia Gorshkova, Director of the Strategic Planning and Macroeconomic Forecasting Department of the Ministry of Economy, in early August, the Ministry had already assumed economic growth of 5% in 2023, but so far it has conservatively maintained the 2.8% estimate, taking into account the existing risks. At that time, the Ministry of Economy predicted that GDP growth would accelerate to 5% next year, with inflation slowing to 10.8%.
At the end of July, the National Bank of Ukraine 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%.
In August, inflation in Ukraine fell to 8.6% in annual terms.
The Experts Club research project and Maksym Urakin recently released an analytical video about the economies of Ukraine and the world – https://youtu.be/zCJ1cU3n0sY?si=LFj-pDmojahwtHkA
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Africa’s population growth rate threatens that the continent’s resources will no longer be enough to meet the needs of its inhabitants, Egyptian President Abdel Fattah al-Sisi said on Tuesday.
“On the African continent, we will reach the 1.6 billion mark within a few years. Africa is abundant with resources, but they cannot help everyone,” Arab news quoted the president as saying at the first Global Congress on Population, Health and Development, which runs from September 5 to 8 in Cairo.
He noted that the congress should be held annually due to the urgency of the problem.
According to the president, the number of Egyptian citizens reaches 105 million, and in addition to them, there are another 9 million people in the country, but the Egyptian government, unlike some other countries, manages to cope with the related challenges. At the same time, al-Sisi clarified, the ratio between national resources and population growth has become less optimal over the past 75 years, and this has affected the health and education system.
For his part, Egyptian Health Minister Khalid Abdel Ghaffar emphasized that demographic growth is the most serious challenge for the country. Minister of Planning and Economic Development Hala El-Sayed noted that although the birth rate has declined, Egypt’s population has grown by another 25 million people over the past 10 years.
Earlier, the Experts Club project released an analytical video about economic relations between Egypt and Ukraine.
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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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Ukraine’s total public debt in August 2023 increased by 3.1% to a new historic high: in dollar terms – by $4bn to $132.92bn, in hryvnia terms – by UAH 146.2bn to UAH 4 trillion 860.6bn, according to data on the website of the Ministry of Finance.
According to them, the direct state debt increased by 3.3% to $123.63 billion, or up to UAH 4 trillion 521.1 billion, and amounted to 93.0% of the total amount of public and state-guaranteed debt.
It is reported that external direct debt in August increased by 4.4%, or $3.52 billion, to $83.41 billion, while domestic direct debt increased by 1.1%, or UAH 15.8 billion, to UAH 1 trillion 470.75 billion (equivalent to $40.22 billion).
The total external public debt of Ukraine in August-2023 increased by 4.1%, or $3.58 billion, to $90.77 billion, while the total domestic debt increased by 1.0%, or UAH 15.2 billion, to UAH 1 trillion 541.4 billion.
As a result, the share of total external government debt increased to 68.3%.
As a result, the share of total external government debt rose to 68.3%.
According to the Ministry of Finance, the share of liabilities in euros at the end of August rose to 28.36%, in U.S. dollars – to 26.66%, while in hryvnia decreased to 28.87%, in SDR – to 12.89%, in Canadian dollars – to 2.48%, and in yen and British pounds remained at 0.72% and 0.02%, respectively.
The office also clarified that 64.86% of government debt has a fixed interest rate, while 12.89% is pegged to the IMF rate, 7.85% to SOFR, 3.88% to EURIBOR and 0.72% to TORF.
Another 2.99% of government debt is tied to the consumer price index, while 6.49% is tied to the NBU discount rate. We are talking about government bonds from the portfolio of the National Bank. The newest of them were securities linked to the discount rate, which were purchased by the NBU within the framework of emission financing of the budget.
Finally, 0.31% of government debt has a rate linked to the Ukrainian index of interest rates on individual deposits, used in portfolio guarantee programs.
As reported, Ukraine’s public and state-guaranteed debt increased by $13.4 billion to $111.45 billion in 2022. In the first eight months of this year, the state debt increased by $21.47 billion, or 19.3%.
In the framework of the first revision of the EFF extended financing program with Ukraine at the end of June, the IMF significantly improved the forecast of the government debt growth this year – from 98.3% of GDP to 88.1% of GDP, including by revising its estimate for the end of last year from 81.7% of GDP to 78.5% of GDP.
Experts Club Research Project and Maxim Urakin recently released an analytical video about the economy of Ukraine and the world:
You can subscribe to the Experts Club YouTube channel by following the link – https://www.youtube.com/@ExpertsClub
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
On August 19-20, the capital’s SPORT LIFE fitness center became the main competition arena for squash fans from all over Ukraine and the world. The Zenit Ukraine Open 2023 charity tournament brought together more than 100 players who came from Kyiv, Lviv, Kharkiv, Dnipro, Khmelnytskyi, Poltava, Kherson and Odesa, as well as from France, the USA, Turkey and Moldova.
The participants competed in various categories ranging from Lady B to Men A. The winners in their categories were:
Lady B category:
Anetta Siganevich
Veronika Levkivska
Yulia Yakimova
Lady A category:
Daria Vlasenko
Tatiana Stanko
Veronika Usenko
Category Men D:
Roman Popov
Anton Babushko
Stepan Kobzev
Category Men C:
Anton Skaballanovich
Kirill Leonov
Araik Sargsyan
Category Men B:
Maxim Shumelda
Rostyslav Zavinskyi
Dmytro Baluta
Category Men A:
Nikita Panov
Ruslan Petrovych
Maxim Tokar
After the sports part, the winners were awarded at the Brugge restaurant, where a charity auction and a patriotic buffet were also held. The joint efforts of the participants and the host Andriy Dzhedzhula raised over UAH 100,000. These funds will be used to support squash players and the army.
The event could not have become so bright and successful without the support of partners and sponsors:
The main fitness partner “SPORT LIFE“;
The event was organized by the Ukrainian Squash Federation;
Information partner – Interfax Ukraine news agency, Open4Business;
Official sponsor – Experts Club;
Medical partner – Adonis chain of clinics;
Partner of the award ceremony – “VILLA TINTA”;
Prizes and gifts were presented by Sport Life, Reima and Tecnifibre;
The official water of the tournament is KRAINA;
Beer for participants and guests was provided by TERMO-PAB;
All tournament guests were accommodated at FAVOR HOTEL;
The award ceremony and party were held in partnership with the BRUGGE restaurant.
The tournament confirmed that charity and sport can go hand in hand, bringing joy and helping people.
Source https://interfax.com.ua/news/press-release/930405.html
BLAGOPOLETNY, FESTIVAL, PECHENOK, SHCHERBAKOV, UMAN, URAKIN, WINE, ФСУ
