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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 pushed it into recession in 2020 (-4%). According to the IMF, GDP growth rebounded to 3.5% in 2021, supported by the revival of external and domestic demand, as well as fiscal and monetary stimulus, and despite the new waves of Covid-19 infections. Economic growth was expected to accelerate marginally in 2022 (3.6%) before slowing down slightly in 2023 (3.4%) (IMF), but Russia’s invasion of Ukraine on February 24th 2022 darkened the outlook. The government called on Ukrainian citizens to resist but Russia’s determination suggests further escalation. Massive infrastructure destruction, disruption of agriculture, industry and trade, and large capital outflows will provoke a sharp contraction of economic growth in 2022 (The Economist Intelligence Unit).

Until February 2020, the Ukrainian economy was still in a robust macroeconomic state thanks to the successful implementation of a reform program, with declining public debt, falling inflation and positive growth forecasts, but the outbreak of the pandemic and the government reshuffle darkened the outlook (Euler Hermes). In June 2020, the IMF approved a USD 5 billion support package to help Ukraine to cope with COVID-19 pandemic challenges. Policies under the new arrangement focused on four priorities: mitigating the economic impact of the crisis; ensuring continued central bank independence and a flexible exchange rate; safeguarding financial stability while recovering the costs from bank resolutions; and moving forward with key governance and anti-corruption measures to preserve and deepen recent gains (IMF). The IMF approved an extension of the Stand-By Arrangement to end-June 2022. Following Russia’s attack, 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). Before the war, declining nominal GDP and Covid-19-related fiscal stimulus widened the fiscal deficit. After soaring to -5.2% GDP in 2020, public deficit decreased to -4% GDP in 2021 (IMF). It was expected to further decrease to -3.4% GDP in 2022 and -2.3% GDP in 2023 (IMF), but will deteriorate because of the conflict-related expenses and decreased revenues. Similarly, public debt, which reached 60.8% GDP in 2020, fell to 54.4% GDP in 2021 and was expected to continue decreasing to 51.7% GDP in 2022 and 48.9% GDP in 2023 (IMF). It is now forecast to widen. Inflation, which reached record lows in 2020 (2.7%), picked up again in 2021, reaching 9.5% (IMF). It was expected to decline gradually to 7.1% in 2022 and 5.8% in 2023 (IMF), thanks to better harvests, price corrections in global commodity markets, the hryvnia’s relative strength, the fading of low base effects, and the further impact of the NBU’s monetary policy tightening measures (National Bank of Ukraine). However, the war is causing food shortages and soaring inflation.
In addition to the continuation of the reform program agreed with the IMF, the priorities of the State Budget for 2022 remained unchanged: healthcare, education, security and defence, social sphere, infrastructure, business support and innovation (Ukraine Government Portal). Since Russia’s invasion, the government is focused on organising the resistance and gathering political and logistical support from the international community.
 
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 9.7% in 2021 and was forecast to stay high in 2022 (8.7%) and 2023 (8.2%) 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.

 
GDP Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 154.00e155.30e181.04203.93222.82
GDP (constant prices, annual % change) 3.2e-4.0e3.53.63.4
GDP per capita (USD) 3,690e3,741e4,3844,9585,440
General government balance (in % of GDP) -1.8-5.2e-4.0-3.4-2.3
General government gross debt (in % of GDP) 50.560.8e54.451.748.9
Inflation rate (%) 7.92.7e9.40.00.0
Unemployment rate (% of the labor force) 8.59.2e9.78.78.2
Current Account (billions USD) -4.216.23e-1.24-4.97-7.27
Current account (in % of GDP) -2.74.0e-0.7-2.4-3.3

Font: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated data

 
Monetary indicators 20162017201820192020
Ukrainian Hryvnia (UAH) - Average annual exchange rate for 1 EUR 27.1830.0432.0928.9930.79

Font: World Bank, 2015

 

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Actualitzacions: September 2022

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