Ukraine's GDP to grow by 3.5% this year - World Bank

The World Bank says that despite the Russian invasion, Ukraine's economy is showing signs of moderate recovery due to more reliable electricity supplies and steady receipt of aid from Western powers. This year, GDP is expected to grow by 3.5%.

As Ukrinform reports, this is stated in the Europe and Central Asia Economic Update published by the World Bank.

If hostilities on the territory of Ukraine continue until the middle of next year, GDP will grow by 3.5% in 2023 and by 4% in 2024, the review says.

"Starting in late 2024, Ukraine’s econ[1]omy is expected to recover more rapidly under the baseline assumption, driven by public investment, as reconstruction and export activity pick up," the World Bank noted.

A number of factors contributed to the recovery of GDP growth, including improved electricity supply, containment of active hostilities, and more reliable receipt of foreign aid in the first half of 2023.

The review also noted that inflation has eased to 8.6% over the year and is suggested to gradually decline to 7% by 2025. However, many households continue to face financial difficulties, and the poverty rate is set to remain high this year at 22%.

Ukraine's current account deficit was $1.3 billion in the first half of 2023 due to the high growth of imports and further reduction of exports, the World Bank notes.

The economic situation in the country is being pressured by Russia's withdrawal from the Black Sea Grain Initiative in July, which affects Ukraine's main exports, and dependence on foreign loans, which provoked a large external debt, the document says.

As Ukrinform reported earlier, the economic survey published in April this year stated that the World Bank expected Ukraine's GDP to grow by 0.5% in 2023 – after a sharp drop to almost -30% last year after Russia’s full-scale invasion of Ukraine.