Ministry of Economy preliminary estimates fall in Ukraine's GDP in 2022 at 30.4%

The fall in real gross domestic product (GDP) of Ukraine in 2022 is estimated at 30.4% [±2%], which is better than preliminary forecasts, the Economy Ministry said on Thursday.

As noted in a press release from the ministry, in December, the fall in GDP is estimated at 34% [±2%] compared with 37% [±2%] in November, given a certain stabilization of the energy supply situation after shelling in November.

"However, further terrorist missile attacks by Russia caused, although not critical, damage (in particular to energy infrastructure), which continued to put pressure on business confidence and activity," the ministry added.

In general, in the fourth quarter, according to the Ministry of Economy, GDP fell by 35.5% [±2%], which is worse than the third quarter, according to the State Statistics Service – 30.8%, but better than the second, when the economy contracted by 37.2%.

The ministry recalled that in the first quarter, the fall in GDP, according to the State Statistics Service, amounted to 15.1%, and in 2021, GDP grew by 3.4%.

"During 2022, the Ukrainian economy suffered the largest losses, damages in the history of independence that the Russian Federation inflicted on it, scaling on February 24 along the entire length of the common border and from the territory of Belarus and the occupied Crimea its terror, which began back in 2014," First Deputy Prime Minister, Minister of Economy Yulia Svyrydenko said.

At the same time, she said that the success of the Ukrainian Defence Forces on the battlefield, the well-coordinated work of the government and business, the speed of restoration of destroyed/damaged critical infrastructure facilities, as well as systemic financial support from international partners, made it possible to maintain the economic front.

The Ministry of Economy previously said that Russian attacks on energy infrastructure, which began on October 10, increased the rate of decline in the Ukrainian economy last year to approximately 39% in October and 41% in November, as a result of which the forecast for a decline in the whole year was worsened from 32% to 33.2%, but later adjusted to 32%.

At a briefing on December 8, NBU officials also said that Russian energy terror worsened their estimate of last year's GDP decline by 31.5%, but did not specify by how much. The IMF expects the Ukrainian economy to fall by 33% in 2022.

For 2023, the Ministry of Economy maintains a forecast for GDP growth of 3.2%, while according to the baseline scenario of the IMF, this year the Ukrainian economy will grow by 1%. However, the Fund also considers two other scenarios: negative with a fall in GDP by 12.5%, or up to 57% from pre-war, and positive with its growth by 10%, or up to 75% from pre-war.

The National Bank previously said that for 2023, even in the base, relatively optimistic scenario with effective protection of energy facilities and prompt restoration of the system, GDP growth will be very sluggish and much lower than the 4% that the Central Bank allowed in the October forecast.

IC UAC according to the Interfax-Ukraine