Ukraine Ministry of Economy dampens GDP outlook

Ukraine’s Ministry of Economy lowered its real GDP
forecast to 4.1% yoy from 4.6% yoy for 2021 and to 3.8% yoy from 4.3% yoy for
2022, Interfax Ukraine reported on May 21 citing ex-minister Ihor Petrashko.

The ex-minister informed that the updated forecast
would be used for developing a three-year Budget Declaration. Meanwhile, the drop of the economy in 1Q21 of 2.0% yoy
was less severe than the ministry expected (-3.0% yoy). The average inflation
in 2021 will amount 8.8%, the ministry predicts.

Evgeniya Akhtyrko: The government’s updated GDP forecast coincides with our current
vision. Apparently, the government has no break-through economic strategy, and
it is less risky to ground the country’s budget on a more conservative
macroeconomic forecast.  In addition, the accuracy of the economic outlook
for 2021 is affected by the very low and uneven comparative base of the
previous year as well as unclear outlook for further pandemic developments in
the country.