REUTERS
Gas transit is expected to shrink from 90 bcm in 2019 to 50 bcm in 2020 and 30 bcm in 2021.
The National Bank of Ukraine (NBU) has estimated potential direct economic losses as a result of a possible decline in Russian natural gas transit at 0.6% and 0.9% of GDP in 2020 and 2021, respectively with further decline.
Gas transit is expected to shrink from 90 billion cubic meters (bcm) in 2019, to 50 bcm in 2020, and to 30 bcm in 2021 and further, under the baseline scenario, according to the NBU's October 2019 Inflation Report.
At the same time, alternative scenarios are being considered, which provide for both higher and lower transit volumes.
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The NBU recalled that Russia is actively commissioning gas pipelines bypassing Ukraine, which in terms of their total capacity are able to completely replace the Ukrainian gas transmission system (GTS) in the coming years.
In addition, a 10-year gas transit contract between Ukraine and Russia on gas transit ends in 2019. However, there is no certainty on the timing and volume of further gas transit for the time being.
Ukraine has been receiving about US$3 billion a year under a gas transit contract, whose termination will not only lead to direct losses in foreign currency earnings, but also create risks for related sectors of the economy and Ukraine's ability to meet own gas demand.
As UNIAN reported earlier, the National Bank revised its forecast for the growth of Ukraine's real gross domestic product (GDP) in 2019 upwards, to 3.5% from a previously projected level of 3%.
The central bank says the outlook for 2020 and 2021 was also revised upwards, to 3.5% and 4%, respectively.
According to the NBU, the country's inflation outlook remained unchanged at 6.3% this year and 5% both in 2020 and 2021.