National Bank deepens 2020 GDP drop forecast to 6-7%

The National Bank of Ukraine (NBU) downgraded its
projections of the 2020 real GDP drop to 6-7% yoy from 5% yoy, NBU Deputy Governor
Dmytro Sologub said in an interview with the liga.net news site published on
May 27. “Given the data on the first quarter drop, industrial output and
transportation indicators in April, I believe the decline might be more serious
than previously expected,” Sologub said. The downgrade “isn’t that
much of a big difference” and everything is moving in about the same
scenario being considered by the central bank, he said.

Evgeniya Akhtyrko: GDP potentially
falling 6-7% yoy isn’t that much different as for other countries. For
instance, the 2020 E.U. GDP is expected to fall 7.4% yoy, according to the
recent forecast by the European Commission. The consensus forecast by Bloomberg
puts the U.S. GDP drop at 5.7% yoy. But the greatest distinction of the global
recession’s effect in Ukraine will be a plunge in consumer spending and
disposable income, which had been a key economic engine.

But given Ukraine’s lower level of economic
development, the negative effect of the global recession on individual
wellbeing will be much greater than in developed economies.