In 2022, inflation will reach 31% and GDP will fall by a third. In the coming year, the economy is expected to return to the path of growth, while inflation momentum is slowing.
This is reported by the press service of the National Bank, reports Ukrinform.
“With the lingering impact of most supply shocks, inflation will accelerate and hit 31% by the end of 2022. The main focus here is on the consequences of hostilities and the high energy costs. Next year there will be inflation. It is expected to slow due to better inflation expectations, improved logistics and gradual crop growth,” the report said.
It is noted that an additional deflationary effect will be a fall in global inflation and tightening monetary policy by the NBU. Instead, high energy costs and the need to gradually raise domestic tariffs to market levels will prevent inflation from slowing. As a result, consumer inflation will fall to around 20% in 2023 and only drop to single digits in late 2024.
Also read: The NBU sets the official hryvnia exchange rate at 36.56 per US dollar
At the same time, the Russian invasion of Ukraine led to a sharp drop in economic activity and a loss of economic potential. Economic activity has recovered since April mainly due to the liberation of the northern regions and the cessation of hostilities, but the economy is operating at much lower capacity than before the war. As a result, real GDP will shrink by a third in 2022, according to the NBU Outlook.
Provided that the security risks subside, the economy will return to the growth path next year due to the resumption of investment activity, including the revival of consumer demand, the adjustment of technical and logistical processes thanks to the European integration prospects. Significant production and workforce losses would hamper the recovery. GDP will grow at an annual rate of around 5-6% in 2023-2024.
As reported, on July 21, 2022, the National Bank adjusted the official exchange rate of the hryvnia by 25% to UAH 36.5686, noting changes in the basic characteristics of the Ukrainian economy during the war and the strengthening of the US dollar. . other currencies.