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The National Bank of Ukraine has changed its forecast for Ukraine's GDP growth in 2017 from 3% to 2.5%

09.11.2016

The National Bank of Ukraine has worsened the estimate of GDP growth in 2017 from 3% to 2.5% and from 4% to 3.5% in 2018.

 

"The forecast reconsideration for the next two years is caused by worsened external environment for Ukrainian exporters compared to the previous expectations," – this is said in the NBU’s inflationary review released on Thursday evening.

 

According to the National Bank, considering the record world cereal production for the marketing years 2016-2017, their prices will remain at the low level, and steel prices also won`t demonstrate a significant growth due to the high volume of its supply on the world markets.

 

At the same time the main driver of economic growth for the years 2017-2018 will be investment, as it is observed during the current year, according to the central bank.

 

"Private consumption will recover moderately as well. Its growth will be stimulated by the activation of pent-up demand and the increase of household income. An additional factor for the increase of both consumption and investment will be credit activity recovery due to lowering of interest rates in the economy",  –   this was noted in the Report.

 

The NBU also clarifies that it has kept the forecast of economic development for the current year unchanged  –  at 1.1%.

 

According to the NBU’s estimates, GDP growth in the third quarter of 2016 compared to the same quarter of 2015 accelerated very slightly - to 1.6% from 1.4% in the second quarter. "The potential of transport movement in the east of the country was still limited, and there was another deepening in transit restrictions imposed by the Russian Federation. Simultaneously, due to the yield growth, the volumes of early crops harvesting were high. As a result, active export of grain crops became the engine of wholesale trade" - the NBU commented on such a result.

 

In concordance with the document, the forecast of current account deficit was leveled up to USD 2.5 bln in 2016, to USD 2.9 bln in 2017 and USD 2.8 bln  in 2018.

 

"This indicator will be higher than it was expected previously, foremost, because of the abovementioned worsening of trade terms and, secondly, due to the rapid recovery of investment demand for imported goods, particularly, machinery and equipment.", - the central bank explained.

 

Following: Interfax-Ukraine