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Macroeconomic forecast

  • Macroeconomic Forecast Ukraine - 2017 recovery in Ukraine

    04.05.2016

    Real GDP is estimated to grow in the first quarter of 2016. Performance of most sectors was in line with our expectations. During the rest of the year we expect economic agents to start moving out of crisis mode. This should lead to slow growth of domestic demand. Real private final consumption will be supported by increases in social standards and reduction in payroll taxes. Investments will grow again despite the lack of financial resources and high uncertainty hampering planning for the future. They will be allocated for most necessary maintenance and modernisation projects. Exchange rate is expected to be stable, and core inflation will be closer to 10%. As a result, real GDP in 2016is expected to increase by 1.6% from low base of 2015.

    We expect slow but steady recovery to take hold in 2017. Domestic and external demand will increase and leading to growth in industrial output and construction. Under baseline scenario we forecast real GDP to grow by 3.3% in 2017 under the assumption that the Government continues implementing scheduled reforms.

    However, there are many risks of the forecast. They primarily include the escalation of military conflict in the East and resurgence of political crisis.

    Issue:  No.4 (103) April 2016

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