Representatives of business supported the initiative of the Cabinet of Ministers of Ukraine to develop the National Economic Strategy 2030.

The document was discussed at a meeting of the Club of the Cabinet of Ministers on 14 August with the participation of representatives of the government, the Office of the President, top officials of the National Bank of Ukraine as well as top managers of over 50 Ukrainian companies.

The national economic strategy includes initiatives to become the basis for state targeted programs. The government is going to commence implementation of the programs in 2021.

The document’s pillars will be seven vectors of Ukraine’s development:

Prime Minister of Ukraine Denys Shmyhal urged representatives of business to actively contribute to drafting the strategy, particularly to present their proposals for and vision of Ukraine’s development for the next 10 years.

According to Mr Shmyhal, the National Economic Strategy 2030 is a single national economic vision that is supposed to become a benchmark for Ukraine’s foreign partners.

“It is our confidence in the future for both businesses and ordinary citizens. Economic development is the basis for the prosperity of Ukrainians and is impossible without certain drivers. This is exactly the approach that the strategy is based on,” underlines Mr Shmyhal.

The strategy will be drafted on the basis of the Economic Recovery Center.

“We will identify the major development vectors approved by the government, business, public and experts as well as religious leaders. Our joint efforts have already helped the government develop the Economic Stimulus Program, some of our insights were included in the government Action Program and other government programs,” says Kyrylo Kryvolap, Director of the Economic Recovery Center.

The State Statistics Service of Ukraine reported a 11.4% drop in the country’s real GDP in Q2 2020 compared to the same period a year earlier.

Real GDP declined by 9.9% against the previous quarter.

GMK Center earlier reported that the National Bank of Ukraine forecasted a 11% economic recession in Q2 2020 compared to the same period of the previous year.

The key recession factors include quarantine restrictions imposed on certain economic activities and a decline in agricultural production due to delayed harvesting.

Expert organizations polled by the Ministry for Development of Economy, Trade and Agriculture downgraded a forecast for a fall in Ukraine’s real gross domestic product in 2020 by 1.8 percentage points, from 4.2% to 6%, according to the data of the Ministry of Economy’s consensus forecast for July.

“Ukraine shows a deeper decline than the global economy, reaching 6% in 2020,” the consensus forecast says.

At the same time, experts expect the economic growth to resume in 2021 and amount to 3.2% until the end of the next year, not 2.4% as expected earlier.

Key indicators of the consensus forecast for 2020–2021, median value

Nominal GDP₴3,964 bln₴4,391.4 bln
Real GDP, y-o-y-0.063.2%
Consumption, y-o-y-0.042.4%
Exports of goods and services, y-o-y-8.2%4.2%
Imports of goods and services, y-o-y-13.3%8.1%
Industrial production, y-o-y-7.9%2.2%
Agriculture, y-o-y-2.3%2.3%
Consumer price index, December on December105.8%1.06
Consumer price index, year average103.1%106.8%
Producer price index, December on December1.08107.1%
Producer price index, year average98.1%107.3%

Besides, experts interviewed by the Ministry of Economy improved inflation forecast for 2020 by 1.2 percentage points.

Average yearly rate in 2020 is expected to be ₴27/$1. Next year, experts forecast devaluation to ₴28.6/$1 on average.

“All elements of demand will show negative trends, but the biggest drop is anticipated in investment, down to 14.8% from 20.3% in the previous consensus forecast,” the document says.

Experts also downgraded unemployment growth forecast for this year from 9.4% to 9.6%, with a downfall to 9.2% next year.

Among the main assumptions of the consensus forecast is the high possibility of a second wave of the COVID-19 pandemic in H2 2020.

The consensus forecast was prepared on the basis of updated estimations by experts of the Ministry of Economy, Ministry of Finance, National Bank, and over a dozen of governmental and non-governmental organizations and companies.

As GMK Center reported earlier, in mid-April, the Ministry of Economy downgraded its forecast for a real GDP fall to 4.2% in 2020. In early August, the Ministry of Economy estimated a drop in Ukraine’s real GDP in H1 at 6.5%