NBU Estimating GDP Growth In 2021 At 3%, Worsens Its Growth Forecast In 2022 From 3.8% To 3.4%

The National Bank estimates GDP growth in 2021 at 3% and worsened its growth forecast in 2022 from 3.8% to 3.4%.

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

"According to the results of 2021, real GDP growth, according to NBU estimates, amounted to about 3%. The economic recovery was supported by strong consumer demand, increased investment by enterprises after the crisis, as well as a record crop harvest. At that, the economic recovery was slower than expected. Among the reasons are the rapid rise in energy prices and shortages, the impact of low 2020 harvests, the slow recovery of the service sector, the limited capacity of certain manufacturing sectors, more significant losses from the pandemic, as well as faster fiscal consolidation," the statement says.

Besides, the real GDP growth forecast for 2022 has been revised from 3.8% to 3.4%.

It is noted that the economy will be supported by consumer demand and still favorable terms of trade.

The tense geopolitical situation will remain an important deterrent, which negatively affects investment decisions.

Besides, despite the gradual fading of the pandemic, the consequences of the coronavirus crisis will remain quite tangible.

Relatively high energy prices and a shortage of certain types of raw materials, primarily in the first half of the year, will also limit upside potential.

In 2023-2024, real GDP growth will accelerate to about 4% per year.

This should be helped by the stabilization of the geopolitical situation during 2022, the final exhaustion of the negative effects of the pandemic, further growth of the global economy and the preservation of fairly favorable terms of trade.

As Ukrainian News Agency earlier reported, the NBU worsened its inflation forecast for 2022 from 5% to 7.7%.

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