Ukraine’s economy remains resilient after two years of russia’s full-scale invasion. Despite attacks by russia on Ukraine’s energy infrastructure, it is likely that Ukraine will see real economic growth of around 3 per cent in 2024. This continues the trend of wartime recovery after Ukraine’s economy contracted by around 29 per cent in 2022, followed by real economic growth of 5 per cent in 2023, according to the International Monetary Fund, the UK Defense Intelligence reports.
The National Bank of Ukraine (NBU) improved the annual inflation forecast to 8.2 per cent for 2024, down from 8.6 per cent previously forecasted. Inflation in Ukraine fell to 3.2 per cent on an annualized basis in March 2024, reinforcing the trend of falling inflation levels from the peak of over 26 per cent in 2022. However, inflation is likely to rise in the second half of 2024. The NBU projects fading effects from last year’s strong harvest, a continued recovery in consumption and rising costs for businesses during the war.
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Continued improvements in the economic conditions of Ukraine have almost certainly allowed the NBU to progressively lower its base interest rate. The NBU lowered the base interest rate to 13.5 per cent at the end of April 2024, down from 14.5 per cent set in March 2024 and below the wartime peak of 25 per cent.
Read more: The UK Defense Intelligence Reports on the Situation in Kharkiv Region
