In 2020, Ukraine will show a deeper decline (by 4.2%) than the global economy, which will reduce by 3.0% according to the IMF prediction as Ukraine’s Economy Ministry reported.
According to the ministry’s prediction, in 2020, the inflation processes will accelerate by 7% against 4.1% in 2019 (the calculation includes December in comparison with December 2019). As a result of the devaluation processes, the mid-year exchange rate will make 28.85 hryvnia per US dollar.
All elements of the demand will have a negative dynamic but the fall in investment will be the highest and it will make 14.8%. For support of the demand of the population and mitigation of the negative consequences of the quarantine events, the budget support will increase and it will lead to the growth of deficit of the budget up to 5.6% of the GDP.
The retail and wholesale trade, transport, metallurgy and mechanical engineering will contain the economic dynamics the most.
The situation in the labor market will remain difficult until the end of 2020. Unemployment will be long-term due to the significant fall of the economy and significant structural changes.
The migrants will return to the cities where they work outside Ukraine due to the ongoing risk of infection and economic issues in the world. The level of unemployment will be significant this year (9.4%).
However, in 2021, the economic growth at the level of 2.4% will be observed; however, it will not compensate fall in 2020. The inflation will slow down up t 5.9% (the calculation includes December in comparison with December 2019). All elements of the demands will have positive dynamics. The largest increase will be observed in the investments – as the effect of the law base – 6.9%. Unemployment will show a gradual reduction up to 9.1% but it will not reach the level observed before the pandemic.
The prediction of the economic and social development of Ukraine for 2020-2021 is calculated on the basis of the materials provided by the experts of the Ministry of the Development of Economy, Trade and Agriculture, Finance Ministry, the National Bank of Ukraine, state institutes, investment companies and banks. All predictions are the expert assessments of the specialists but not the official predictions of the establishments.
As we reported, the analytics of the International Monetary Fund (IMF) predicted the global fallout in 2020 for 3% due to the coronavirus pandemic. For Ukraine, the economic crisis will be worse – the fall for 7.7%.
