GDP Growth

Before Russia's full-scale invasion of Ukraine, it was estimated that the country's GDP growth rate for 2022 would be 3.4%. However, due to the destruction of infrastructure and economic slow down caused by the invasion, in 2022 Ukraine had seen a significant decline in its GDP of -29.1%.

Amid a stable energy framework and macro- financial solidity, domestic demand has surged, prompting a swifter economic rebound than anticipated. Consequently, the NBU has revised its real GDP growth forecast upwards from to. With the NBU projecting a dip in security risks by , increased investment during reconstruction, and lenient fiscal policies, economic expansion is expected to gain further momentum.

Inflation and exchange rate

From October 3, 2023, the NBU implemented a managed exchange rate flexibility within a defined corridor. With international reserves standing at approximately at the start of September 2023, the NBU can sustain exchange rate steadiness through market interventions.

In 2023's first half, robust domestic performance, a global dip in inflation, and Ukraine's stringent monetary stance enabled the NBU to notably revise its inflation projection for the year from to . The inflation rate is expected to keep falling, driven by enhanced security boosting production and investments, decreasing global energy prices, and the resurgence of domestic demand and wages, alongside adjustments in utility tariffs post-conflict.

International reserves

In 2022, Ukraine received over in aid from partner countries, of which over USD 14 bln was in grants. Thanks to this, it was possible to finance most of the deficit of the consolidated budget and increase international reserves to by the end of 2022. In 2023, international partners have already provided loans and grants to Ukraine in the amount of almost USD 28 bln, thanks to which Ukraine's international reserves reached a record at the end of September. According to the results of 2023, international aid is expected to reach . This will allow the National Bank of Ukraine to continue to maintain international reserves at a sufficient level.

The current level of international reserves is sufficient to ensure the stability of the foreign exchange market.

Support from international partners

Since February 2022, Ukraine has received unprecedented external financial support in the total amount of USD 64.9 bln.

This financial assistance for Ukraine came from 22 countries of the world, the European Union, the World Bank, the European Investment Bank, and the International Monetary Fund.

The USA (USD 22.9 bln) and the EU (USD22.6 bln) are the largest donors.

Trade balance

During 2022, exports of Ukrainian goods stayed steady, despite obstruction of the Grain Corridor by Russia. At the same time, imports have risen significantly when compared to previous periods due to the need to buy alternative energy and fuel sources caused by Russia's attacks on Ukraine's energy infrastructure.

Key achievements

Key achievements:

• became an EU member candidate
• obtained 5 "visa-free" regimes with the European Union incl.:
  - energy (ENTSO-e accession)
  - customs (NCTS accession)
  - transport (removed barriers for road transportation)
  - digital (mutual recognition of qualified electronic trust services)
  - economic (cancellation of all EU customs duties and quotas for Ukrainian goods)
• secured import duties cancelation in trade with the United Kingdom, Canada, Australia and the United States of America (steel imports only)
• integrated in the Trans-European Transport Network (TEN-T)

International companies continue investing in Ukraine

International companies continue investing in Ukraine

• ArcellorMittal. Continues the construction of the new ‘Karta III’ tailing storage facility
• Bayer. Announced investment project worth USD 38+ mln for constructing agro-processing plant.
• Head. Continues the construction of a USD 83 mln factory for the production of equipment for winter sports
• Kingspan. Announced investment project worth USD 300+ mln for constructing 6 factories manufacturing sustainable building materials.
• Risoil S.A. Continues the construction of a large-scale transshipment complex in the port of Chornomorsk.

Source

UkraineInvest. (2024, September). Guide to doing business in Ukraine. Government of Ukraine.

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