Ukraine's government announced forecasts for the next three years / Photo from UNIAN
Macroeconomic benchmarks are used to draft a national budget.
Ukraine's Cabinet of Ministers has prepared three scenarios for the development of the country's economy in 2019-2021.
The first scenario is based on assumptions that ongoing reforms continue and conditions in global markets remain favorable. The scenario suggests a moderate reaction of the economy to reforms. According to this base-case scenario, GDP growth will be 3% in 2019, 3.8% in 2020, and 4.1% in 2021, Ukraine's business news outlet Ekonomichna Pravda wrote, referring to the relevant document. This scenario coincides with the forecasts given by the International Monetary Fund (IMF) for Ukraine, and Ukraine's Ministry of Economic Development and Trade proposes that next year's budget be based on it.
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The second scenario stipulates the implementation of complex reforms, namely the land and tax ones in the part of taxation of corporate profit, i.e. the introduction of the so-called exit capital tax. The external environment under this scenario remains favorable and GDP growth is projected at 4.1% in 2019, 5% in 2020, and 5.4% in 2021.
The third scenario predicts that negative trends in the external environment will weaken reforms, primarily in the financial sector. The slowdown of economic development and the loss of foreign investors' confidence will aggravate the issue of Ukraine's debt repayments.
Under this worse-case scenario, the country's GDP will be able to grow by 1.1% in 2019, by 1.6% in 2020, and by 2.1% in 2021.
Macroeconomic benchmarks are used to draw up a national budget for the following year.