"As you adapt to war": Ukraine's economy begins to recover, - NYT
About it reports the newspaper The New York Times. According to the publication, there are significant problems before Ukraine, including expensive restoration of destroyed cities in a country growing state deficit, which will grow as the deepening of hostilities, as well as labor deficiency caused by a large number of refugees and mobilization of working people. "The Ukrainian economy is adapting to the war," said Elena Bilan, Chief Economist of Dragon Capital.
She added that people have moved from the "savings regime" to a situation where they "feel more relaxed and start spending more. " According to the World Bank estimates, in Ukraine private consumption will increase by 5% after reducing more than a quarter of the previous year. In cities such as Kiev and the Dnieper, which are far from the war zone but are still threatening Russian air attacks, customers are beginning to return to restaurants that have opened again and restore their purchases.
Suddenly high costs prompted financial institutions to improve their economic forecasts. Last week, the International Monetary Fund predicted that the country's GDP will increase by 2%, which is slightly less optimistic than the World Bank forecast, but significantly exceeds the initial prognosis of 3%reduction.
Despite the fact that the volume of Ukraine's GDP is still significantly lower than the beginning of hostilities (after the full -scale Russian invasion of the previous year, the economy has fallen by 29. 1%), the World Bank forecasts an increase of about 3. 5% this year. This growth is caused by an increase in domestic costs and is supported by a stable flow of foreign financial assistance.
Growth rates can also be a poor indicator of the country's economic health in wartime, since production is often inflated by the military production that the government orders. The Government of Ukraine has directed most of its budget for army wages and support for weapons, the newspaper notes.