Economic trends of Ukraine
Fueled by private consumption and gross fixed capital formation, real GDP growth in 2018 was +3.6%, higher than IMF forecast of +3.2%. Official salaries per person in Ukraine increased by 55% in USD equivalent over the past three years (+USD 104.1) and do not include +30%-40% of “backdoor salary.” In the absence of increases in energy tariffs, rapidly rising wages (the minimum wage was doubled in 2017), and slowing inflation will support household spending; investment will remain robust. With a new IMF deal now approved, economic growth will remain at around 3% in 2019-2021.
The National Bank of Ukraine (NBU) has forecast a decline in inflation to 6.3% in 2019 and a further fall to 5.8% in 2020. NBU officials attribute this downward trend to tight monetary conditions and restrained fiscal policies. The rate of inflation was 9.8% in 2018, the best indicator for the past five years following a sharp rise in 2014-15. As inflation drops, Ukraine’s GDP remains on a steady growth trajectory.
© 2019 DUCAT