NBU expects Ukraine's GDP to grow by 4% in 2021

The National Bank of Ukraine (NBU) expects the country's gross domestic product to fall by 6% in 2020 and grow by 4% in 2021, NBU Governor Kyrylo Shevchenko has said.

"The Ukrainian economy will shrink by 6% in 2020, but in the coming years it will return to growth at about 4%," Shevchenko said at a briefing on Thursday, October 22.

According to him, the contraction of the economy this year is primarily the result of a difficult second quarter for businesses, in which the strictest lockdown restrictions were imposed. At the same time, business activity intensified significantly as restrictions have gradually eased. The worse harvest of the agricultural sector and the lower fiscal impulse will compensate for the resumption of consumer and investment demand in the second half of the year.

Private consumption will remain the main driver of GDP growth at 4% in 2021-2022. Economic growth will be supported by fiscal stimulus, soft monetary policy and the recovery of external demand. An important prerequisite for such a scenario is the absence in the future of strict quarantine restrictions both in Ukraine and in the world.

The IMF expects this year's coronavirus crisis to lead to a 7.2% reduction in Ukraine's GDP while the Ukrainian government expects the economy to contract by 4.8%.

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