REUTERS
The adverse impact of the pandemic on the Ukrainian economy is expected to be relatively short-term, but strong.
The National Bank of Ukraine (NBU) says the country's economy will shrink by 5% in 2020 over the quarantine restrictions to overcome the coronavirus pandemic and the global crisis, but it will resume growth in the following years.
"The economy of Ukraine will contract by 5.0% in 2020 in the wake of the quarantine imposed to overcome the pandemic and due to the global crisis. However, it will resume growth at round 4% in the following years," the NBU said on its website on April 23.
Read alsoUkraine's Economy Ministry predicts GDP to drop by 4.2% in 2020
"The quarantine has already affected business activity, consumption, and employment. A decrease in global demand has also limited export opportunities for Ukraine. According to NBU estimates, the effect of these factors will be the most pronounced in Q2 2020," the report said.
The adverse impact of the pandemic on the Ukrainian economy is expected to be relatively short-term, but strong.
"A gradual lifting of quarantine restrictions will allow the economy to recover in H2 2020. Loose fiscal and monetary policies will contribute to the economic recovery. An increase in budgetary spending by the government to overcome the crisis, along with the NBU's actions to support the banking system, will mitigate the negative impact the pandemic has on the economy," the regulator added.
As UNIAN reported earlier, the growth of Ukraine's real GDP in the fourth quarter (Q4) of 2019 was 1.5% year-over-year (y-o-y), having slowed down from 4.1% in Q3 2019 y-o-y.
The country's GDP in January-February 2020 dropped by 0.2%, according to Ukraine's Ministry for Development of Economy, Trade and Agriculture.
The ministry expects that coronavirus and quarantine measures will lead to serious consequences for the country's economy, especially in the first half of the year.
The Cabinet of Ministers in late March revised downward the forecast for inflation, wages, and the GDP in the previously published macroeconomic forecast for 2020. In particular, according to the updated outlook, the inflation rate will grow from 8.7% to 11.6%, while Ukraine's GDP in annual terms will fall by 4.8% from 3.9% projected earlier.
Ukraine's key lender, the International Monetary Fund (IMF), forecasts that Ukraine's economy may decline by 7.7% in 2020.
The World Bank worsened the forecast for the Ukrainian economy, expecting it to fall by 3.5% in 2020.