S&P has worsened its forecast for Ukraine’s GDP growth; the long-term sovereign FC rating outlook is negative.

Economic growth in Ukraine will continue in 2024 because of the expansion of domestic demand and the further recovery of sea exports, but it will decrease to 3.9% from about 5.5% last year, according to S&P Global Ratings.

“In the absence of a significant escalation of the war, we forecast that Ukraine’s economy will grow by approximately 4-5% on average in the medium term, but recovery to pre-war levels is unlikely,” the agency emphasizes.

Also, according to S&P estimates, average annual inflation will decrease to about 7% from 12.8% last year, but it will strengthen in the second half of the year. The hryvnia exchange rate is expected to decrease to ₴41.02 per $1 at the end of the year and to ₴43.89 at the end of the next year.

At the same time, S&P lowered Ukraine’s rating in foreign currency from CCC to CC. Experts expect that Ukraine will soon begin formal negotiations with private creditors regarding debt restructuring and complete the process by mid-2024.