IMF upgrades Ukraine's GDP growth forecast to 4.5%

The International Monetary Fund (IMF) has released an upgraded economic forecast for Ukraine, projecting a GDP growth of 4.5% by the end of 2023.

“The Ukrainian economy continues to show remarkable resilience and further signs of stabilization as recent economic developments point to a stronger-than-expected economic recovery in 2023 and a substantial disinflation, amid strong reserves and a stable foreign exchange market,” the IMF said in a press release.

Therefore, the IMF upgraded real GDP growth for 2023 to 4.5 percent (from the previous range of 1-3 percent when the EFF first review was completed). However, growth is expected to soften to a range of 3-4 percent in 2024 as the war continues, and downside risks to the outlook remain exceptionally high. 

At the same time, the IMF praised the NBU's recent steps to managed exchange rate flexibility.

“The National Bank of Ukraine’s (NBU’s) recent move to managed exchange rate flexibility, in line with its Strategy, has proceeded successfully. It is a welcome step toward restoring the pre-war monetary policy framework and helps strengthen the resilience of the economy to external shocks,” the IMF said.

As reported by Ukrinform, Prime Minister of Ukraine Denys Shmyhal said on Friday that Ukraine and the IMF had reached staff-level agreement on the second review of the Extended Fund Facility (EFF) Arrangement. This agreement paves the way for Ukraine to receive a new IMF tranche worth about $900 million.