Experts of the International Monetary Fund have updated the forecast regarding the duration of the war between Russia and Ukraine, leaving unchanged the terms of the end of active hostilities in the base scenario. About this it is said in the IMF memorandum.
“The scenario still assumes that the war will end by the end of 2025, while the assumptions about the development of the energy sector and the main policy goals will remain,” – is emphasized in the document.
According to forecasts, in 2024 the real GDP of Ukraine will grow by 4%, which is higher than previous estimates. The economic impact of the winter energy shortage may be less severe than previously expected, thanks to business investment in own generation, increased imports from Europe and efforts to restore and build energy capacity.
At the same time, the inflation forecast for the end of the year has been raised to 10%, which is due to the increase in the prices of raw materials, food inflation, and an increase in wages and energy costs.
For 2025, the base scenario predicts GDP growth at the level of 2.5–3.5%. The improvement of the energy infrastructure in 2024 and the launch of new capacities in 2025 will contribute to the economic recovery. However, this impact will be partially offset by the tightening of the labor market, which will support household incomes and consumption, while contributing to the reduction of inflationary pressure in the second half of the year.
