Daily Management Review

Following A Severe Decline, Ukrainian Economy Could Expand By 15.5% In 2023


Following A Severe Decline, Ukrainian Economy Could Expand By 15.5% In 2023
Ukraine's economy should normalise this year and grow by up to 15.5 per cent in 2023, contingent to military developments in the country's war against Russia, the country's economy minister told the media in an interview.
Yulia Svyrydenko, first vice prime minister, said government officials were working on getting macroeconomic projections prior of the beginning of talks with the International Monetary Fund on a new lending programme next month.
In the basement of the Cabinet of Ministers, surrounded by sandbags amid increased warnings of possible attacks on Kyiv, Svyrydenko said current forecasts for GDP in 2023 ranged from a further contraction of 0.4% to an expansion of 15.5%, following a likely contraction of 30-35% this year.

"We understand that we have to keep the economy moving. It’s very hard to make new forecasts because of the uncertainty. It fully depends on the military scenario," Svyrydenko added.
Svyrydenko declined to say how much money Ukraine would ask for from the IMF, but she did say that the new programme needed to be approved quickly and should be "relatively large" in order to free up money from other creditors and reassure investors.
An IMF loan of $5 billion over 18 months, according to Oleg Ustenko, a senior economic adviser to President Volodymyr Zelenskiy, could act as an anchor for a larger package of $15 billion to $20 billion from other creditors.
Although experts said such a large amount would put Ukraine well over the fund's "exceptional access limit" for lending, that was roughly the amount that Kyrylo Shevchenko, the governor of Ukraine's central bank, had identified as a target for IMF funding over two or three years.
The IMF authorised $1.4 billion in emergency financing with few conditions in the initial weeks of the war, which is referred to as a "special military operation" by Russia and cancelled Ukraine's previous $5 billion loan programme with it in March.
Ukraine is preparing for what is very likely to be a brutal winter marked by energy shortages, rising inflation, and a worsening humanitarian crisis as it struggles with the internal displacement of about 7 million people and the loss of millions more who have fled to Europe.
Svyrydenko likewise urged institutions and donor nations to follow through on their commitments to provide aid.
Since Russia's invasion, Ukraine has received $12.7 billion in international budget support from other nations and organisations. According to her, another $14 billion in already committed aid is anticipated to arrive before the end of the year.
"It’s very important for us to keep getting this financial aid - and aid in general - from our partners," she said.
"We’re fighting for values that are important for Europe and the United States."