The war hit Ukraine’s economy in a way that had not been seen in any country in the world for a long time. The question of whether the state will stand on the background of the destroyed industrial and agricultural complex is quite appropriate. The International Monetary Fund gave its forecast for the situation in 2023.
What will happen to the GDP?
With the start of a full-scale invasion, the World Bank predicted a 45% drop in GDP by the end of 2022. Already in the fourth quarter, adjustments were made and it was noted that it would be a figure of 35%. In December, it was stated that the indicator is better than expected, it is 30%.
What was the reason for that? The biggest worries were caused by large-scale power outages across the country. Attacks on critical facilities and huge costs for repairing the energy structure should have led to worse consequences than it turned out later.
In the fourth – critical – quarter, Ukraine coped with an extremely difficult task thanks to stabilization outages. This largely determines what is now expected in 2023. The experts of the World Bank believe that the GDP will not just stop decreasing by December, but will also increase by 1%.
Inflation rate
The IMF assures that inflation is inevitable. Its level is considered to be as follows:
- 2022 – 26.6%;
- 2023 – 20%;
- 2024 – 12.5%;
- 2025 – 8%.
It is believed that only in 2027, the economy of Ukraine will reach the target inflation rate of 5%.
Falling wages
During the months of the war, the real wages of Ukrainians fell by 21.1%, which significantly affected the average ability to pay. The forecast for the following years is as follows:
- 2023 – decrease by another 2%;
- 2024 – growth by 2.5%;
- 2025 – growth by 5%.
In the following years, the indicator is difficult to predict.
Unemployment
At the beginning of the Russian invasion, the unemployment rate was 24.5%, that is, about 2 million people remained unemployed. Further, the following indicators are provided:
- 2023 – 20.9%;
- 2024 – 11.9%;
- 2025 – 9.7%.
It should be noted that these data are derived from the assumption that the war will end by the end of 2023.
