The National Bank significantly improved forecasts of GDP growth and inflation
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Taking into account the rapid restoration of the energy system, as well as soft fiscal policy, the National Bank improved the forecast of economic growth in 2023 from 0.3% to 2%. This was reported by the press service of the regulator.
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“When implementing the assumptions about the security situation, significant electricity deficits will not be foreseen in the future, with the exception of local and situational deficits in the second half of the year. At the same time, an increase in budget expenditures against the background of significant volumes of international financial aid will support economic activity and consumption,” the NBU noted.
The National Bank expects that the reduction of security risks from next year, which is allowed in the base scenario of the regulator’s forecast, will contribute to the acceleration of economic growth – up to 4.3% in 2024 and up to 6.4% – in 2025.
“Yes, the deoccupation of the territories and the full opening of the Black Sea ports will gradually increase industrial production and increase harvests. In addition, domestic demand is expected to expand due to the return of a part of forced migrants,” the regulator said.
Read also: NBU kept the discount rate at the level of 25%
Inflation forecast
The NBU also significantly improved the inflation forecast in 2023. The regulator predicts a slowdown in inflation to 14.8% at the end of the year compared to 18.7% in the previous forecast.
“The weakening of price pressure in the following years will primarily be facilitated by the reduction of security risks, which is the main assumption of the NBU forecast. Under such conditions, an improvement in inflation expectations is predicted, as well as an increase in the supply of goods due to the restoration of optimal logistics routes and production capacities,” the NBU noted.
Taking this into account, the National Bank expects inflation to decrease to 9.6% in 2024, and to 6% in 2025.
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News editor Roman Myronchuk writes on the following topics: Economy, finance, banks, cryptocurrencies, investments, technologies
Source: Ministry of Finance
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