Ukraine’s economy could grow by 15.5% in 2023 after a deep fall

KYIV (Reuters) – Ukraine’s economy is expected to stabilize over the coming year and grow by up to 15.5% in 2023, depending on military developments in the war against Russia that began on May 24. February, the country’s economy minister told Reuters in an interview.

Yulia Svyrydenko, who is also first deputy prime minister, said government officials were compiling macroeconomic forecasts ahead of the start of negotiations next month with the International Monetary Fund on a new lending program.

Surrounded by sandbags in the basement of the Cabinet of Ministers amid heightened warnings of possible attacks on Kyiv, Svyrydenko said the current forecast for gross domestic product in 2023 ranged from a further contraction of 0.4 % to an expansion of 15.5%, after a probable contraction of 30-35% this year.

“We understand that we have to keep the economy moving. It is very difficult to make new forecasts because of the uncertainty. It depends entirely on the military scenario,” Svyrydenko added.

While Svyrydenko declined to specify how much Ukraine would request from the IMF, she said the new program should be “relatively large” and needed to be agreed quickly to help free up funds from other creditors and reassure investors. .

Oleg Ustenko, senior economic adviser to President Volodymyr Zelenskiy, said this month that an IMF loan of $5 billion over 18 months could anchor a larger $15-20 billion package. other creditors.

That’s about the amount Ukraine’s central bank governor Kyrylo Shevchenko had identified as the IMF’s two- or three-year funding target, though experts said such a large amount would put the well beyond the fund’s “exceptional access limit” for loans.

Ukraine’s previous $5 billion loan program with the IMF was canceled in March as the IMF approved $1.4 billion in emergency financing with few conditions in the first weeks of the war , what Russia calls a “special military operation”.

Ukraine, grappling with the internal displacement of some 7 million people and the loss of millions more who have fled to Europe, is preparing for what will most likely be a brutal winter marked by energy shortages , rising inflation and worsening humanitarian crisis.

Svyrydenko also urged donor countries and institutions to honor their pledges of assistance.

Ukraine has received $12.7 billion in international budget support from other countries and institutions since the Russian invasion, and expects an additional $14 billion in already pledged aid to arrive before the end of the year, she said.

“It’s very important for us to continue to receive this financial help – and help in general – from our partners,” she said.

“We are fighting for values ​​that are important for Europe and the United States.”

(Reporting by Andrea Shalal; Editing by Gareth Jones)

Copyright 2022 Thomson Reuters.

Christi C. Elwood