Fitch Expectating Ukraine's GDP To Grow 2.9% In 2022, International Reserves To Decline USD 6 Billion

The Fitch international rating agency forecast Ukraine's gross domestic product to grow by 2.9% in 2022 and by 3.5% in 2023.

The agency has said this in a statement, Ukrainian News Agency reports.

According to the report, inflation will remain at around 10% in the first half of 2022 (followed by a 200-basis-points increase in the NBU rate to 12%) and then fall to 7.9% at the end of 2022 and 5.3% at end of 2023.

It is also reported that restricted external financing conditions, a wider current account deficit, and a moderate outflow of non-residents from government debt will weaken the position of international reserves, which will decline by USD 6 billion in 2022 to USD 25 billion (2.8 months of current external payments), and then partially recover to 3.1 months at the end of 2023, but below the projected 'B' median of 4.2 months.

The budget deficit is expected to be 3.4% of GDP in 2022, with 0.5 percentage point tax hikes to help offset ongoing spending pressures and expected gas subsidies.

The deficit is projected to fall to 2.8% of GDP in 2023, compared to a B median of 3.7%.

The government debt to GDP ratio will decline to 42.2% by the end of 2023, below the projected median of 67.6% for 'B' countries.

As Ukrainian News Agency earlier reported, Fitch revised Ukraine's rating outlook from Positive to Stable.