Ukraine's GDP will rise by 4.2% and will continue to grow rapidly at around 4% in 2022–2023, the regulator believes.
The National Bank of Ukraine (NBU) says the country's economy contracted much less than expected in 2020, and it will grow at the rate of around 4% in 2021 and the following years, after the coronavirus crisis.
"The NBU estimates real GDP to decline by 4.4% in 2020, which is less than expected in the previous forecast (6%)," the regulator's press service said on its website on January 21.
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The rapid economic recovery was mainly driven by growth in domestic consumption. Increased household incomes and budget spending are keeping consumption high. Retail trade continued to grow rapidly in Q4. GDP dynamics were also improved by higher current budget expenditures on infrastructure, especially on road repairs, and on healthcare. On the other hand, companies' investment activity remained sluggish.
In 2021, the economy will almost recover from the losses inflicted by the coronavirus crisis: Ukraine's GDP will rise by 4.2% and will continue to grow rapidly at around 4% in 2022–2023, according to the NBU.
"Strong domestic demand will remain the main economic growth driver, underpinned by further increases in real household income. Lower uncertainty about the course of the pandemic will favor a recovery in investment activity," the press service said.
"The surplus of Ukraine's current account is expected to hit one of its record-high levels, reaching 4.8% of GDP. In 2021–2023, however, the current account will return to deficit," it added.