The Ukrainian economy is gradually recovering after the upheavals caused by the corona crisis and the start of a full-scale war. The National Bank predicts that by the end of 2024, economic growth (GDP level indicator) will be 3%. In the next two years, GDP growth is expected to accelerate to 5.3% and 4.5%, respectively. Incomes of the population should also increase by more than 8%.
“Economic recovery will continue thanks to the high adaptability of Ukrainian business and the population. This will also be facilitated by a soft fiscal policy, the revival of external demand, the further development of export routes and the growth of household incomes. However, the negative impact of the war on economic activity remains significant. In addition, the momentum of rapid growth on the low basis of comparison, the year 2022 is gradually running out,” – informed National Bank of Ukraine.
What will affect the state of the economy?
Economic growth will not be as high as expected, as the country will experience electricity shortages caused by Russian attacks on energy infrastructure. According to NBU calculations, the electricity deficit this year will be about 5%.
Despite this, international support will help maintain the positive dynamics of development.
“The NBU keeps the budget deficit forecast for 2024 unchanged at 20.7% of GDP. International aid will remain an important source of its coverage, which will amount to 37.9 billion USD this year,” the National Bank reported.
However, it is expected that the volume of financial support from foreign partners will decrease over the next two years. According to previous estimates and agreements, international financing will decrease to $25.1 billion in 2025, and to $12.6 billion in 2026.
Real wages and incomes will rise
The decrease in the number of working-age population in the country due to migration and mobilization will contribute to the increase in the number of vacancies and increase in wages. Employers will compete for qualified workers.
“Already next year, real wages in the economy will exceed their pre-war level and will continue to grow, in particular due to increased competition for labor with foreign employers. It is forecast that this year the income of the population in real terms, i.e. excluding inflation, will grow by 8.1% , and in the next two years by 6.5% and 3%, respectively,” the NBU reported.
