Ukraine recorded fivefold decrease in inflation in 2023
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Ukraine saw a significant drop in inflation accompanied by robust economic growth in 2023, Andriy Pyshnyi, the Ukrainian National Bank’s (NBU) head, said in an interview with the "We are Ukraine" YouTube channel on Jan. 6.
"At the beginning of the year, inflation was 26%, the forecast predicting zero economic growth, immense uncertainty, and a record-breaking key interest rate,” said Pyshnyi.
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“But as we close out the year, we're looking at 5% growth and inflation."
He attributed the positive economic trend to the NBU's strategic move last year of reducing the key interest rate, thanks to the nation's macroeconomic stability.
"The risks tied to international financial assistance dynamics remain, as well as the strain on public finances due to Ukraine's substantial war budget," Pyshnyi said.
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Ukraine maintained a stable dollar exchange rate and sustained its gold and foreign exchange reserves at a high level, as indicated in the economic results obtained at the end of the 2023, he said.
Ukraine's international reserves reportedly soared to $40.5 billion as of Jan. 1, 2024, marking a substantial 42% increase in 2023.
The NBU revised Ukraine's GDP growth projection from 2.9% to 4.9% for 2023 at the end of October. The outlook for 2024 saw a slight adjustment from 3.5% to 3.6%, while the 2025 forecast dipped from 6.8% to 6%.
The Ukrainian government, during the second reading approval of the draft state budget in early November, upgraded the GDP growth estimate for 2023 from 2.8% to 5%. However, the outlook for 2024 underwent a modest downward revision from 5% to 4.6%.
Fitch Raitings earlier confirmed Ukraine's rating at the level of CC and also raised its forecast for global economic growth.
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