Further cooperation with IMF to let Ukraine's economy grow by 4.3% – expert

Ukraine's gross domestic product (GDP) may grow by 4.3% in 2021 if cooperation with the International Monetary Fund (IMF) continues.

Vitaliy Kravchuk, a senior research fellow with the Institute for Economic Research and Policy Consulting, announced this at a press conference on March 10.

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"Our current forecast for real GDP growth expected at 4.3% in 2021 is driven by a set of assumptions. These include continued cooperation with the IMF to ensure access to lending for Ukraine on easier terms. This, in turn, requires continued reforms and a healthy monetary and sustainable fiscal policy," he said.

According to the Institute's press service, the Ukrainian economy in 2021 will be recovering due to the growth of private consumption on the demand side and an increase in production in industry, transport, as well as in agriculture from the supply side. This will be facilitated by an economic recovery in partner countries and increased trade.

"According to the forecast, private consumption will grow by 5.9% in 2021, while investment will increase by 8.9%. Both exports and imports will get to previous indicators. The contribution of net exports to GDP will be negative due to the rapid growth of imports," it said.

It also says that the gradual lifting of COVID-19-related restrictions will contribute to the growth of the transport sector, which will support an increase in external and internal demand for industrial products. Agriculture is expected to grow by 5% in 2021 after a poor harvest in 2020 caused by weather conditions.

IMF in Ukraine

• On June 9, 2020, the IMF's Executive Board adopted an 18-month Stand-By Arrangement (SBA) worth SDR 3.6 billion, or about US$5 billion, aimed at helping Ukraine overcome the consequences of the COVID-19 pandemic.
• On June 12, Ukraine received the first IMF disbursement worth US$2.1 billion under the SBA.
• In late November, the Finance Ministry reported on the successful completion of talks with the IMF on benchmarks of the draft budget for 2021, which was one of the major prerequisites for starting the SBA review.
• On January 11, 2021, an IMF mission resumed work in Kyiv, they worked until February 12 but departed without any decision on the SBA review.