UK intel believes Ukraine’s economy likely to grow by around 3% in 2024

The relevant statement was made by the Ministry of Defence of the United Kingdom on the social media platform X, referring to the latest Defence Intelligence update, an Ukrinform correspondent reports.

“Despite attacks by Russia on Ukraine’s energy infrastructure, it is likely that Ukraine will see real economic growth of around 3 per cent in 2024,” the report states.

According to the International Monetary Fund (IMF), this continues the trend of wartime recovery after Ukraine’s economy contracted by around 29% in 2022, followed by real economic growth of 5% in 2023.

The National Bank of Ukraine (NBU) improved the annual inflation forecast to 8.2% for 2024, down from 8.6% previously forecasted. In March 2024, inflation in Ukraine dropped to 3.2% in annual terms, reinforcing the trend of falling inflation levels from the peak of over 26% in 2022.

However, the analysts believe that inflation is likely to rise in the second half of 2024. The NBU expects fading effects from last year’s strong harvest, a continued recovery in consumption, and rising costs for businesses amid the war.

“Continued improvements in the economic conditions of Ukraine have almost certainly allowed the NBU to progressively lower its base interest rate,” the UK Ministry of Defence noted.

In late April 2024, the NBU lowered the base interest rate to 13.5%, down from 14.5% set in March 2024 and below the wartime peak of 25%.

A reminder that, according to the International Monetary Fund (IMF), Ukraine’s economy is likely to show a rise of 3.2% in 2024 and 6.5% in 2025.