Oxford Economics dampened Ukraine's GDP growth forecast in 2021 from 4.4% in July to 4% in August. At the same time, an increase of 3.5% is expected in 2022, and not 4.2%, as predicted earlier, due to the risks of further lockdowns and possible tightening of fiscal and monetary policies.
This is stated in the Oxford Economics forecast that the agency Interfax-Ukraine has.
Disappointing data for the second quarter forced Oxford Economics to reduce the GDP forecast. Considering that the level of vaccination in Ukraine is one of the lowest in Europe (less than 7% of the population) due to the insufficient number of vaccines and the indecisiveness of the population regarding vaccination, in the coming months the number of cases of COVID-19 can increase again.
Forecast of inflation, dollar, and cooperation of the IMF with Ukraine
Oxford Economics expects inflation in 2021 to be about 9.2% with a further decrease to 6.7% and 5.4% in 2022 and 2023, respectively.
As for the hryvnia course, in 2021 it will be at the level of 28.4 UAH per dollar, in 2022—at the level of 29.3 UAH, and in 2023—at the level 29.4 UAH per dollar.
In addition, Oxford Economics considers it unlikely that the International Monetary Fund will resume the Stand-by program with Ukraine this year due to the fact that the government disposes of income from the two issues of Eurobonds. In addition, the forecast reads that peak payments on the public debt will help cover $2.7 billion from the IMF’s new SDR distribution.
"In 2022, Ukraine will have to pay $6.5 billion in public debt. This year, Ukraine can miss the chance to get a new IMF tranche due to the lack of political will. In this case, the resumption of cooperation with the Fund next year remains likely," the report says.
Context. Earlier, the Center for Macroeconomic Modeling of the Kyiv School of Economics dampened the forecast of Ukraine's GDP growth in 2021 to 3.6% (4.7% in April), but improved the forecast of the economic growth in 2022 to 4.4% (it was 2.7% ).