Panorama econòmic

Economic indicators

On February 24th 2022, Russia initiated a military conflict on the Ukrainian territory, which profoundly upsets the current political context in both countries and will have substantial political and economic ramifications. For the ongoing updates on the developments of Russia-Ukraine conflict please consult the dedicated pages on BBC News.

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

After years of political and economic tension, the Ukrainian economy had started to stabilise, but the outbreak of COVID-19 in 2020 and then Russia’s invasion in February 2022 pushed it in recession. After renewing with positive growth in 2021 (+3.4% GDP), Ukraine’s economy contracted by an estimated -35% GDP (IMF), due to massive infrastructure destruction, disruption of agriculture, industry and trade, large capital outflows and an exodus of workers (The Economist Intelligence Unit). The government called on Ukrainian citizens to resist and received international support but Russia’s determination suggests further escalation. In these circumstances, no GDP forecast is available for 2023.

In 2022, Ukraine’s economy was still recovering from the consequences of the COVID-19 pandemic when it suffered from the devastating attack from Russia. The IMF and the World Bank issued a join statement condemning the offensive and ensuring Ukraine for their support. The IMF responded to Ukraine’s request for emergency financing through a possible Rapid Financing Instrument; and the World Bank started to prepare a USD 3 billion package of support (including the mobilization of financing from several development partners) comprising fast-disbursing budget support operation and fast-disbursing support for health and education (IMF). The protracted war had a devastating social and economic impact on Ukraine. In addition tof numerous civilian casualties, over a third of the population has been displaced, access to basic needs such as electricity, water, and heating is at risk, and housing, infrastructure, and productive capacity suffered from massive destruction (IMF). The authorities managed to maintain macroeconomic and financial stability, but public finances are under extreme pressure (IMF). According to Coface data, the budget deficit soared from -4% GDP in 2021 to -23.9% GDP in 2022, and public debt rose from 50.7% GDP in 2021 to 80% GDP in 2022. Inflation increased from 9.4% in 2021 to 20.6% in 2022 (IMF), and could reach 28% in 2023 according to Ukrainian authorities forecast. In December 2022, the IMF approved a 4-month Program Monitoring with Board Involvement (PBM, the first arrangement of its kind), designed to help Ukraine maintain economic stability and catalyze donor financing amid very large balance of payment needs and exceptionally high risks (IMF). Key measures under the PMB include enhancing revenue mobilization and reviving the domestic debt market, preparing a financial sector strategy, and enhancing transparency and governance (IMF). Since Russia’s invasion, the government is focused on organising the resistance and gathering political and logistical support from the international community. Intended to help bring victory against Russia, Ukraine’s 2023 Budget planned a record deficit of USD 38 billion. It gives priority to the armed force and national security, and also covers pensions, healthcare and education. The U.S. 2023 budget also allocated USD 44.9 billion for aid to Ukraine.

Ukraine's unemployment rate was falling until 2019, but due to the negative economic impact of the COVID-19 pandemic, it is estimated to have increased to 9.8% in 2021 and was forecast to stay high before the start of the war (IMF). The informal sector in Ukraine is estimated to account for a third of the country's GDP, and GDP per capita (at purchasing power parity) is only 20% of the EU average. The human cost of the war with Russia is still unknown but already, hundred of civilians have been killed, hundreds of thousands refugees have fled the country, and supply chains disruption have triggered food shortages.

Vols fer algun comentari sobre aquest contingut? Escriu-nos.