The decline of Ukraine’s economy slowed to 35% y/y in August 2022 – Ministry of Economy

In August 2022, the Ministry of Economy estimates a drop in the real GDP of Ukraine by 35% compared to August 2021. The department’s website reports about it in its press release.

“As we can see, the pace of GDP decline is slowing down. This is confirmed by the trends observed in the second quarter and August 2022,” the message informs.

The macro indicators of August 2022 were positively affected by the partial unblocking of grain exports, as well as the acceleration of the grain collection pace in the controlled territories of Ukraine.

In 2022, the Ministry expects a slowdown in the rate of GDP decline to 33.2% on an annual basis.

“In the future, the pace of recovery will depend on the situation at the front, the scale and speed of receiving donor aid, the availability of ports for export, the return of Ukrainians from abroad, and the growth of labor productivity. Today there are grounds for restrained optimism,” commented the Minister of Economy Julia Svyrydenko.

In August 2022 business expectations regarding the prospects of their economic activity improved to 44.1 points against 43.6 in July 2022.

“Improving the logistics chains of the petroleum products import and diversifying suppliers stabilized fuel prices, which reduced inflationary pressure on the economy against the background of falling external prices, especially for energy and food,” writes the Ministry of Economy.

Also, in August 2022, Ukraine received a significant amount of international aid – $4.6 billion, including $3 billion in grant funds from the United States through the World Bank. In the near future, this will enable Ukraine to ensure macroeconomic stability, cover military expenses, and reduce the budget deficit.

Previously, the Ministry of Economy predicted a fall of Ukrainian economy by the end of 2022 by 35-40% on an annual basis due to the war started by Russia.

The National Bank of Ukraine predicts a 37.5% decline in the country’s GDP in the second half of the year compared to the same period in 2021. In particular, the decline will be 37.5% in the third quarter, and 39.3% in the fourth.

As GMK Center reported earlier, the National Bank of Ukraine (NBU) also predicts a 33% decline in the country’s economy by the end of 2022 and a subsequent recovery by 5-6% in 2023-2024, subject to the completion of the active phase of the war and the unblocking of the Black Sea ports.