Ukraine's GDP in 2020 may decrease by 4-8%, government program says

The Cabinet of Ministers projects that Ukraine's GDP may decrease by 4-8% in 2020 compared to 2019.

These figures are mentioned in the comprehensive economic recovery program passed on May 27 and published on May 28, the government said on its portal.

Read alsoUkraine's government approves economy recovery program – minister

"According to IMF forecasts, the global economy is expected to decline by 3%. Ukraine is traditionally more vulnerable to economic shocks – GDP may fall by 4-8% compared to 2019," the program says.

The document indicates that the projected decline in the Ukrainian economy is the result of global shocks: an unfavorable situation on key commodity markets, shutdowns of commodity markets for Ukrainian exporters, and a change in global production chains.

"As a result, according to NBU forecasts, Ukraine in 2020 may face a decrease in exports (-10%), imports (-14.5%), widening budget deficits (8% of GDP), and rising unemployment (up to 9.5%)," the program said.

As UNIAN reported earlier, the Cabinet on May 27 approved a government program, "Economic Recovery," to stimulate the economy to overcome COVID-19 consequences.

Earlier, the Verkhovna Rada, Ukraine's parliament, introduced the so-called anti-crisis changes to the national budget for 2020. In particular, the budget deficit almost tripled, to UAH 298.4 billion (US$11.05 billion), or 7.5% of GDP.

The updated budget is based on such forecasts as a 3.9% decline in GDP (it was previously expected to grow by 3.7%) and 9.4% unemployment (instead of 8.1%). The average annual forex rate is set at UAH 29.5 (against UAH 27) per U.S. dollar and inflation is expected to accelerate to 8.7%.

In 2019, the deficit of the national budget was UAH 78 billion (US$2.88 billion), or 1.9% of GDP, while the projected deficit was UAH 91.1 billion (US$3.37 billion), or 2.26% of GDP.