21 August 2024, Wednesday, 16:36 308

ICU predicts GDP growth of 4% with inflation of 7.8% and hryvnia exchange rate of 42.6 UAH/USD in 2024

Editor: Tetiana Herasimova

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The ICU Group predicts GDP growth of 4% with inflation of 7.8% and a hryvnia exchange rate of 42.6 UAH/USD in 2024.

This is stated in the materials of the ICU, the Ukrainian News agency reports.

At the same time, the ICU predicts that international reserves will amount to USD 43.7 billion by the results of the current year, and the accounting rate will be 13%.

With regard to the forecast for 2025, according to ICU calculations, GDP may also grow by 4%, inflation by 8%, and the hryvnia exchange rate may reach 47.7 UAH/USD.

Macroeconomic risks are reported to have increased slightly over the past few months, but remain manageable.

The arrival of significant amounts of international financial aid creates a sufficient level of comfort for the currency market and provides a critically needed boost to the state budget.

Foreign policy risks associated with the possible coming to power in partner countries of governments less friendly to Ukraine can be largely leveled by the USD 50 billion financial aid package currently being negotiated by the G7 countries.

"We forecast that at the end of the year, inflation will be in the range of 7-8%. It will probably continue to accelerate in the first quarter of 2025, but will remain in the single-digit zone. In our opinion, the NBU could have lowered the rate more significantly in the first half of 2024. However, now, when inflation is accelerating and the currency market has gone through a period of turbulence, the National Bank had no choice but to pause in rate cuts. Monetary policy easing in the next few months seems unlikely," the report said.

The foreign exchange market continues to operate with a significant deficit, which has grown significantly in recent months.

The exchange rate smoothing mechanism used by the NBU does not always work perfectly, so the market sometimes experiences periods of moderate turbulence.

As the Ukrainian News agency earlier reported, the National Bank lowered the inflation forecast from 8.2% to 8.5% in 2024, and also improved the GDP growth forecast from 3% to 3.7% in 2024.