NBU improves economic growth forecast for 2023 to 2.9%

NBU's Governor Andriy Pyshnyy announced this at a briefing, an Ukrinform correspondent reports.

"The economy is demonstrating resilience to the new challenges of Russia's war and will grow by 2.9% this year," Pyshnyy said.

According to him, the growth of domestic demand in the context of stable functioning of the energy system and macro-financial stability contributed to the further recovery of economic activity. However, economic growth was limited by Russian constant missile attacks, sabotage of the grain corridor, and destruction of infrastructure facilities.

In addition, trade restrictions on Ukrainian agricultural products imposed by a number of EU countries had a negative impact on business. These factors led to a decline in Ukraine's exports in the second quarter and will continue to hamper economic recovery.

At the same time, the actual results of the first quarter were better than the previous macroeconomic forecast. The economic recovery continued in the second quarter, both in the manufacturing and service sectors.

"In the coming years, economic growth will accelerate, given the assumptions of NBU's forecast of a reduction in security risks in mid-2024," NBU governor said.

He noted that exports will recover more rapidly after maritime logistics are established and Russia's shelling of infrastructure stops. The gradual return of migrants will help revive consumer demand. Investments will increase significantly as the country recovers. Loose fiscal policy will continue to play an important role in stimulating the economy.

"With this in mind, NBU forecasts real GDP growth of 3.5% in 2024 and 6.8% in 2025," Pyshnyy said.

As Ukrinform reported earlier, the Ministry of Finance of Ukraine expects GDP growth of up to 3% in 2023.