Ukrainian economy could grow by 15.5% in 2023 after deep fall – minister

A couple with a child visit an exhibition of destroyed Russian military vehicles and weapons, dedicated to the country’s Independence Day, amid Russia’s attack on Ukraine, in central Kyiv, Ukraine , August 24, 2022. REUTERS/Valentyn Ogirenko

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  • Forecast depends on progress of war, minister says
  • Talks with the IMF on a new lending program begin this fall
  • Ukraine needs ‘relatively large’ help from IMF
  • Ukraine braces for further energy shortages and higher inflation

KYIV, Aug 25 (Reuters) – Ukraine’s economy is expected to stabilize over the coming year and grow by up to 15.5% in 2023, depending on the military developments in the war against Russia that has started on February 24, the country’s economy minister told Reuters. a meeting.

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.

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“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. Read more

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. Read more

winter looms

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 is very important for us to continue to receive this financial assistance – and assistance in general – from our partners,” she said.

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

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Reporting by Andrea Shalal Editing by Gareth Jones

Our standards: The Thomson Reuters Trust Principles.

Christi C. Elwood