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In 2021, officials expect economic growth at 2.4%.
The Ministry for Development of Economy, Trade and Agriculture predicts Ukraine's gross domestic product (GDP) will drop by 4.2% in 2020.
"According to experts, Ukraine will demonstrate a rather steep plunge in 2020 – by 4.2%. In 2020, inflationary processes will accelerate to 7% against 4.1% (calculated from December to December of the previous year) in 2019. However, there will be economic growth at the level of 2.4% in 2021. Inflation will slow down to 5.9% (calculated from December to December of the previous year)," according to an updated consensus forecast "Ukraine in 2020-2021: The consequences of the pandemic," the ministry's press service said.
According to experts, prolongation and strengthening of quarantine measures is the greatest threat to economic recovery in Ukraine.
"With regard to economic policy measures advisable to implement to support businesses pending quarantine measures, the experts rated budget deficit of at least 6% to form sufficient fiscal incentives. As regards the measures that need to be implemented to support the population, this is the provision of state financial assistance to the most vulnerable segments of the population to reduce social tension and stimulate demand," reads the report.
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Most experts also believe the behavior of people and the structure of demand after the pandemic will change, but not significantly. At the same time, the processes of digitalization, robotization and the use of modality of the "remote workplace" will accelerate.
According to experts, significant risks for the Ukrainian economy include lack of external financing and a narrowing of access to international capital markets (external risks), as well as internal risks – a significant increase in the state budget deficit, cash gaps in the Pension Fund, and other state social insurance funds.
As UNIAN reported earlier, on April 3, Ukraine's Cabinet of Ministers revised downwards its outlook for inflation, wages, and GDP.
According to the updated outlook, the inflation rate may increase to 11.6% from 8.7%, and Ukraine's GDP in annual terms may fall by 4.8% from the previously estimated 3.9%. The unemployment rate remained unchanged at 9.4%.