Dragon Capital has revised its macroeconomic forecast for 2024 and now expects Ukraine’s GDP to grow by no more than 5% instead of 8%.

The reason for this reevaluation is the longer duration of the hot war with Russia than previously expected, explained the founder and CEO of the company, Tomas Fiala. Dragon Capital’s previous forecast predicted that security risks would decrease in the first half 2024. This does not mean that the war would be entirely over, but with decreased hostilities the company expected 8% GDP growth by the end of 2024.

“Now we expect the war to last the whole of next year,” Fiala said.

“So, according to the new forecast, the economy will grow by about 2-3%. If this number exceeds our forecast, it will not exceed 5%.”

In addition to direct hostilities, a key role will be played by how effective Ukraine’s Black Sea ports will prove to be for the export of goods. Dragon Capital predicts a moderate hryvnia devaluation for 2024 – the exchange rate at the end of 2024 will be ₴41 for $1, and inflation will be less than 10%.