Ukraine’s Ministry of Economy worsens forecast of Ukrainian GDP decline due to Russian missile strikes on energy system

OLEKSII PAVLYSH – FRIDAY, 2 DECEMBER 2022, 18:53

The Ministry of Economy of Ukraine is forced to return to the original forecast of real GDP decline this year by 32-33.5% due to Russian missile attacks on energy infrastructure.

Source: Yuliia Svyrydenko, First Deputy Prime Minister and Minister of Economy of Ukraine, at a briefing on 2 December, Interfax-Ukraine reports.

Quote: "It is obvious that the macroeconomic forecast should be changed, or rather adjusted. At the beginning of the year, we assumed that the economic decline would be at the level of 32-33%. Then, the economy showed very high adaptive abilities.

However, due to the attack on the energy system that took place in November, some companies, of course, suspended their activities. This indicates that we, as the Ministry of Economy, have somewhat worsened our prospects and, unfortunately, have returned to our previous forecast: by the end of the year the GDP decline may reach 32-33%, even 33.5%," Svyrydenko said.

The Minister suggested that the National Bank of Ukraine would agree with this as well.

Background:

The National Bank of Ukraine (NBU) will consider estimates of the impact of blackouts on the Ukrainian economy at the next week’s meeting of the Monetary Policy Committee. In January of 2023, the NBU will publish updated macroeconomic forecast figures taking into account these factors.

After 9 months of war in Ukraine, Oxford Economics expects that Ukraine's GDP will fall by 31% in 2022, and will shrink by another 2-2.5% next year due to extreme economic challenges.

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