Ukraine’s economy is set to return to growth in 2021, the European Bank for Reconstruction and Development (EBRD) says in its latest Regional Economic Prospects report, published on 29 June.
The Bank forecasts the country’s gross domestic product (GDP) to increase 3.5% on the year in both 2021 and 2022. The major risks to its forecasts are the country’s slow progress on reform and vaccination.
A decline in foreign demand, combined with the impact of repeated lockdowns on domestic demand, caused GDP to decline 4% in 2020. Improved macro-financial management proved an asset in the crisis, helping the country to maintain macroeconomic stability.
“While the economy shrank by 2.2% year on year in the first quarter of 2021 due to prolonged lockdown measures, there are indications that it is gradually returning to growth in the second quarter, benefitting from higher commodity prices,” Dimitar Bogov, lead regional economist at the EBRD.
Ukrainian industrial production was up 1.5% year–on–year and retail trade grew 14% year–on–year in January-April, while exports and imports increased by 12% and 11% on the year, respectively, in the first quarter. Remittances also increased 7% year–on–year in January-April 2021.
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