The actual growth rates of real GDP turned out to be somewhat lower than the National Bank of Ukraine (NBU)'s estimate.
This follows from a statement by the National Bank of Ukraine (NBU), the Ukrainian News agency reports.
In 2023, real GDP grew by 5.3%.
On the one hand, rather high GDP growth was achieved after a deep recession in 2022 (by 28.8%).
On the other hand, the recovery of the economy in the conditions of active hostilities, high-security risks, and terrorist attacks by the russians is a significant result.
Throughout 2023, the full-scale war continued, and Ukraine suffered even greater losses and destruction.
In particular, at the beginning of last year, shelling of the energy infrastructure continued, and electricity shortages persisted.
At the same time, since the second half of February, the situation in the energy sector has stabilized, primarily thanks to quick repairs and increased anti-aircraft defense.
This, together with the high adaptability of business and the population, as well as the soft fiscal policy, led to a significant reduction in the fall in GDP in the 1st quarter of 2023 to 10.3% compared to 30.6% in the 4th quarter of 2022, and further GDP growth. In the summer, the russians destroyed the Kakhovka HEPP, which led to the flooding of large areas and interruptions in water supply in the southern regions.
The suspension of business activities during air raids had a noticeable negative impact throughout the year.
However, despite all the challenges of the war, from the II quarter of 2023, real GDP returned to growth.
In addition to the high adaptability of business and the population, the stable situation in the energy sector for most of the year, and soft fiscal policy, the NBU's efforts to preserve macro-financial stability in Ukraine played a significant role.
The actual growth rate of real GDP turned out to be slightly lower than the estimate of the National Bank published in the Inflation Report for January 2024 (5.7%).
This, in particular, can be explained by more conservative estimates of grain and leguminous harvests by the State Statistics Service.
Soft fiscal policy, which fueled domestic consumer and investment demand, made a significant contribution to economic growth.
Record budget expenditures on defense and security led to a further increase in the role of the public sector in the economy.
Thus, consumption of the public sector as a whole increased by 9% for the year, and its share in GDP more than doubled in two years (in 2023, it reached almost 42% compared to about 18% in 2021).
Private consumption grew by 6.1% thanks to the recovery of real income growth, including wages in the private sector of the economy.
At the same time, during the past year, the number of forced Ukrainian migrants abroad continued to increase, which limited the recovery of consumer demand.
The rapid growth of investments was primarily caused by significant budget expenditures, although the private sector also showed signs of revitalization of investment activity against the background of improved financial results.
The business, in particular, invested in the development of logistics capacities, restoration of energy, means of autonomous energy supply, etc.
Restrictions in work, and then the suspension of the "grain corridor" due to the actions of the russians, as well as the preservation of risks for the operation of Black Sea ports, restrained export supplies.
In conditions of limited domestic production due to the consequences of the war and the revival of demand, import supplies continued to grow.
Last year, imports increased by 8.5%. As a result, the negative contribution of net exports to the change in real GDP remained (it was 6.3 percentage points), although it decreased compared to 2022.
As the Ukrainian News agency earlier reported, according to the NBU forecast, real GDP growth will continue throughout this year.
The recovery of the economy will be supported by the maintenance of a soft fiscal policy thanks to significant international assistance, improvement in business expectations and growth in household incomes, and measures by the NBU and the government to maintain macro-financial stability.
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