Moody's Forecasting Fall In Ukraine's GDP By 35% In 2022

The Moody's international rating agency is forecasting a fall in Ukraine's GDP by 35% in 2022.

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

Moody's expects real GDP to contract sharply by around 35% in 2022, given the heavy loss of life, significant damage to Ukraine's productive capacity and infrastructure, and very large population displacement.

The agency estimates that the regions where the hostilities is taking place or which are occupied by Russian troops accounted for about 20% of Ukraine's GDP, given the concentration of agricultural and industrial activities.

A more protracted military conflict will drain the government's financial resources.

Moody's estimates financing needs this year at about USD 50 billion (35% of GDP in 2022) and projects public debt to rise to about 90% of GDP from about 49% by late 2021.

Moody's also notes that Ukraine's fiscal sustainability will face risks in the medium term due to GDP warrants issued as part of a debt restructuring in 2015.

As Ukrainian News Agency earlier reported, Moody's downgraded the long-term ratings of the government of Ukraine in foreign and national currencies, as well as ratings of senior unsecured debt in foreign currency from Caa2 to Caa3.

The National Bank estimates that the economy will gradually recover, but real GDP could fall by at least a third in 2022.

The World Bank predicts a 45.1% drop in Ukraine's GDP and an 11-fold increase in poverty in 2022.

The World Bank published a report saying that the war in Ukraine will cause a "historic" surge in food and energy prices, which will remain high until late 2024.