The investment company Dragon Capital worsened the forecast for Ukraine’s real GDP for the current year by 2.0 percentage points – up to 32% and kept the forecast for its decline in 2023 by another 5.0%, informs Interfax-Ukraine.

“The shelling is likely to continue, and the increase in demand for electricity in the winter will force to increase the scale and duration of power outages,” the company said.

The role of international finance

It is noted that international financial assistance remains a critical factor in ensuring macro-financial stability. According to Dragon Capital estimates, recent announcements and moves by international partners suggest an increase in international support in 2023 to $42 billion from $32 billion this year, mainly due to the US, the EU and, to a lesser extent, the IMF.

“Receipts from international partners will fully finance the budget deficit, which, according to our estimates, will remain at $38 billion next year, or 27% of GDP. The National Bank is likely to be able to end the risky practice of “printing the hryvnia” for budget purposes next year or at least significantly reduce volumes from the expected UAH 400 billion this year,” analysts suggest.

The dollar may go up

According to their forecasts, the arrival of international support will help keep gold and foreign exchange reserves at an acceptable level and avoid another correction of the hryvnia exchange rate, despite the likely temporary deterioration in the situation on the foreign exchange market in the coming months.

The company expects that as a result of damage to energy infrastructure, the foreign exchange deficit in the interbank foreign exchange market could increase to $4 billion per month during the winter months, compared with a moderate deficit of $2.5 billion per month in August-October.

Expectations for 2023

The GDP forecast for next year is based on the assumption that Ukraine will gradually liberate the occupied territories.

“We expect that as a result of a significant reduction in military risks, the operation of key seaports will be completely unblocked, at least half of the forced migrants (about 4 million people) will return from abroad, and Ukrainian private business will resume investment activities … Launching a large-scale program The recovery of the Ukrainian economy will most likely take time and will begin as early as 2024,” the investment company suggests.

Read also: Exchange rate: the National Bank called the reasons for the growth of the euro

Earlier it was reported that according to official data, the volume of public debt of Ukraine at the beginning of November is already approaching 100 billion dollars. That is, each Ukrainian has a share of about 2.5 thousand dollars.

According to the Ministry of Finance, since the beginning of the year, the United States and the European Union have provided the greatest support to Ukraine – 13 billion and 11.5 billion, respectively, but if the United States has allocated 8.49 billion of this amount in the form of grants, then the EU has only 626 million dollars in grants.