J.P. Morgan downgrades the forecast for real GDP growth in Ukraine in 2021 from 4.5% to 2.3%, while retaining the forecast for growth in 2022 by 5%. This is reported by Interfax-Ukraine referring to the materials of the November EMEA Emerging Markets Research.
"We are sharply revising the GDP for 2021 to 2.3% from the previously expected 4.5%. We keep the forecast of GDP growth for 2022 at 5% and nominal GDP for 2021 at a record $197 billion (from 2022—at the level of $227 billion) unchanged," is stated in J.P. Morgan’s report.
J.P. Morgan points out that the preliminary estimate of Ukraine's GDP growth in July—September of this year at 2.4% in annual terms, announced by the State Statistics Service, was disappointing, as J.P. Morgan envisioned growth of 6.7% for this period, and the National Bank expected 4%, while the consensus forecast envisioned 3.6%. The analysts assume the risk of weaker growth in the Q4 and, as a result, growth of 2% or less in 2021.
Inflation is believed to have peaked in October, but the core inflation has yet to peak. Overall, in 2021 J.P. Morgan expects inflation at 9.4% and 8.3% in 2022.
As J.P. Morgan expects, the hryvnia exchange rate in October-December this year and in January-March 2022 will be at the level of 26.3 UAH/$, in April-June next year—26.5 UAH/$, and in July-September—26, 8 UAH/$.
Context. In 2020, Ukraine's GDP fell by 4%, and in the fQ1 of this year by another 2.2%. The State Statistics Service tentatively estimated growth in the Q2 of this year at 5.4%, but then improved the estimate to 5.7%. According to preliminary estimates of the State Statistics Service, real GDP in the Q3 grew by 2.4%.
Earlier, the International Monetary Fund downgraded its estimate of Ukraine's GDP growth rate in 2021 to 3.5%, compared to 4% in April. The European Bank for Reconstruction and Development kept the forecast for the growth of the Ukrainian economy in 2021 at the level of 3.5%.