According to the forecast of the European Bank for Reconstruction and Development (EBRD), the economy of Ukraine will grow by 3% in 2024.
This follows from a statement by the Bank, the Ukrainian News agency reports.
This pace is lower than the 5.3% rise in 2023 after a sharp drop in 2022 due to the russian invasion.
The EBRD report notes that despite an increase in Ukraine's GDP in 2023, helped by a record harvest, damage to electricity infrastructure due to recent shelling is one of the factors likely to limit further growth in 2024.
The forecast for Ukraine coincides with the general forecast for 2024 for the regions in which the Bank operates (Central and Eastern Europe, Central Asia, and the Southern and Eastern Mediterranean).
The regional growth rate accelerated this year from 2.5% in 2023 despite challenges caused by global geopolitical tensions, including increased trade restrictions.
In 2025, further growth at the level of 3.6% is forecast in the EBRD regions.
The growth of the Ukrainian economy in 2023 was facilitated not only by record harvests but also by an increase in defense spending, which supported domestic demand, but at the same time, net exports continued to decrease.
Among other positive factors, it should be noted the successful restoration of electricity supply after russian shelling of civilian infrastructure last winter, as well as the stability and adaptability of Ukrainian business.
An additional stabilizing factor in 2023 was the timely receipt of external financing, which made it possible to keep inflation at the target level of about 5%.
This included the USD 15.6 billion 48-month Enhanced Financing Facility (EFF) approved by the IMF Board of Directors in March 2024, as well as USD 42.5 billion from donors and international organizations, including USD 12 billion in the form of grants.
Thanks to these inflows, the country's official international reserves increased to record levels. Still, the level of public debt also increased to almost 90% of GDP.
However, new challenges have emerged in 2024, including the prospect of a protracted war of attrition and uncertainty over external funding that has lasted for several months.
Limited domestic demand, labor shortages, and insufficient investment are also factors that have a negative impact on the growth rate.
A significant positive factor was the opening of a new coastal Black Sea export corridor.
This made it possible to partially reduce uncertainty regarding the safety of using the Black Sea for the export of not only grain but also products of the metallurgical and mining industry, which suffered almost the most in the last two years.
After a somewhat slow start, the use of this corridor is gradually gaining momentum.
Taking into account the recovery of exports and the increase in the volume of domestic production of military products, economic growth can be forecast at the level of 3% in 2024, accelerating to 6% in 2025.
At the same time, significant risks remain, particularly in connection with damage to port and energy infrastructure.
As the Ukrainian News agency earlier reported, the National Bank worsened the GDP growth forecast from 3.6% to 3% in 2024.
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