GDP growth in 2021 may reach 4%.

 This will mean that the Ukrainian economy has bounced back after the economic decline due to the coronavirus crisis said Prime Minister Denis Shmyhal on his Facebook page.  Shmyhal said that the optimistic forecast is based on a steadily growing consumer demand, an average salary that is now above $500 per month, an increase in investment to a four-year record, and a record harvest and growth in the agricultural sector. According to the draft State Budget for 2022, real GDP

Another lockdown may lead to a reduction in Ukraine’s GDP.

 The Governor of the National Bank of Ukraine (NBU), Kyrylo Shevchenko, said that a possible lockdown in Ukraine, depending on the format and severity of quarantine restrictions, may lead to a 0.4%-0.6% reduction in GDP. “Although business processes are returning offline and vaccination rates are growing, the risks of introducing a new lockdown due to the spread of new strains of the virus remain significant,” reported ukrinform.

Ukraine’s GDP grew by 6% yoy in the second quarter,

the Economy Ministry reported yesterday. The increase comes after five straight quarters of decline due to the coronavirus pandemic. In a Reuters poll, economists predicted an 8% yoy increase. The Ministry said: “In the second quarter of 2021 economic recovery entered a positive trend, although it continues to be affected by the pandemic.” The government forecasts 4.1% growth for all of 2021, cancelling out last year’s decline of 4%.

J.P. Morgan has predicted that Ukraine’s GDP will grow by 5.6% this year,

said the bank in its April commentary. This is higher than Ukraine’s Central Bank, which lowered its forecast last week to 3.8%. The Economy Ministry came out last week with a ‘consensus forecast’ of 4.1%. J.P. Morgan bases its optimism on EU and global growth in the second half, and on a rebuilding of inventories and a jump in investment in Ukraine. The bank also has predicted that IMF money will flow again to Ukraine in August-September.

The National Bank of Ukraine also downgraded its forecast for real GDP growth in 2021 to 3.8%, from 4.2%.

“The introduction of new quarantine restrictions has led to the suppression of business activity,” the bank said. “The effect of last year’s low harvests affected the indicators of agriculture, food processing and cargo turnover.” After a 2.8% drop during January-February, growth should return in the current second quarter, the bank predicts. The World Bank also predicts 2021 GDP growth of 3.8%.

The economy contracted by 2.8% in January and February, compared to the first two months of last year,

estimated the Ministry of Economic Development and Trade. Except for retail trade, all sectors were down. Consensus forecasts put Ukraine’s 2021 GDP growth at 4%. These forecasts were made before the April coronavirus lockdown in Kyiv and half of the regions. War jitters about Russia’s military threats also may dampen investment.