22 July 2021, Thursday, 15:04 143

NBU Retains GDP Growth Forecast At 3.8-4% In 2021-2023

Редактор: Tetiana Herasimova

The National Bank has left unchanged the forecast for real GDP growth - 3.8-4% in 2021-2023.

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

"Stable consumer demand and favorable foreign trade conditions compensate for the losses of the Ukrainian economy from the strengthened quarantine in winter and spring. Despite this, the National Bank retained its forecast for real GDP growth in 2021 at 3.8%. In the future, the economy will grow by about 4.0% annually. In addition to high private consumption, this will be facilitated by a significant demand for Ukrainian exports, as well as the revitalization of investment activities of enterprises," it was said.

It is noted that in 2021 the current account of the balance of payments will be closed with a deficit of 0.4% of GDP.

This will be driven by an increase in domestic demand, a rebound in foreign tourism and higher dividend payments.

These factors will be offset in part by favorable terms of trade and a record grain harvest.

In 2022-2023, the current account deficit will widen significantly as a result of further growth in domestic demand amid worse terms of trade.

Inflation will slightly exceed 10% in the near future, but will slow down at the end of 2021 and return to the 5% target in the second half of 2022.

Given the rapid rise in world prices and further recovery in demand, the National Bank downgraded the inflation forecast for 2021 from 8.0% to 9.6%.

After reaching a peak this fall, inflation will begin to slow due to the arrival of a new crop and adjustments in global energy prices.

The tightening of the monetary policy of the National Bank, in particular the increase in the discount rate and the curtailment of anti-crisis monetary measures, will also allow keeping inflationary expectations under control and will gradually affect the weakening of fundamental inflationary pressure.

As a result, in the second half of next year, inflation will return to the target of 5% and will remain in this range in the future.

As Ukrainian News Agency earlier reported, in April of this year, the NBU downgraded the inflation forecast for 2021 from 7% to 8% and the forecast for GDP growth from 4.2% to 3.8%.