By Anton Usov
Ukraine’s GDP will fall by 4.5 per cent in 2020 as a result of global coronavirus-related shocks and following slower industrial growth recorded in late 2019 to early 2020 according to the latest macroeconomic survey published by the European Bank for Reconstruction and Development (EBRD) today.
The Bank is expecting Ukraine’s economy to bounce back to growth of 5.0 per cent in 2021.
The EBRD’s Regional Economic Prospects report notes the “soaring cost of refinancing debt in international financial markets” for Ukraine.
A combination of reduced foreign demand and drop in domestic demand due to public health measures put in place to contain the spread of the virus took its toll on the manufacturing and services sectors, argues the report.
The Bank explains that the macro-financial fundamentals remain relatively strong and able to absorb external shocks with record-high level of foreign reserves and the lowest policy rate for six years.
Economies across the EBRD regions may contract on average by 3.5 per cent this year, with a rebound of 4.8 per cent possible in 2021, the report said, warning that the projections are subject to “unprecedented uncertainty”.