ICU Investment Group has improved its forecast for the fall of Ukraine’s gross domestic product (GDP) to 5% from 5.7%, head of the group’s macroeconomic research department Serhiy Nikolaichuk has said.
“In total, the economy will contract by about 5% in 2020 (compared to 5.7% in our September forecast). This will lead to a decrease in GDP below the level of 2018, but compared to most other countries, the Ukrainian economy will demonstrate better dynamics,” he wrote on Facebook.
According to the investment group, GDP growth in Ukraine in the fourth quarter of this year and in the first quarter of the next (to the previous quarters) will be “slow and rather shaky.”
“However, the pace will still be positive,” the expert specified.
He also noted that the impetus from the “opening of the economy” after tough quarantine restrictions, which affected the decline in GDP fall in the previous quarters, has exhausted, so further growth will require other drivers.
“The new outbreak of COVID-19 continues to gain momentum, indicating that the recently introduced weekend quarantine could be replaced with tougher measures across the country,” Nikolaichuk added.
At the same time, he noted that against the background of the return of income to the “pre-epidemic trajectory,” active growth of private consumption continues, and the weakness of private investment is compensated by the ongoing projects of Big Construction.
Nikolaichuk added that ICU expects a significant fiscal impulse for the economy at the end of 2020, despite the fact that it will be lower than provided for in the law on the national budget.
The World Bank has affirmed the forecast for growth of Ukraine’s GDP at 2.7% in 2019, World Bank Country Director for Belarus, Moldova and Ukraine Satu Kahkonen has said.
In 2018, GDP growth was 3.3%, in 2019, the growth would slow down, she said at a press conference in Kyiv on Thursday.