The National Bank of Ukraine (NBU) says the country's economy will be growing in 2021 and it will fully make up for the losses caused by the coronavirus crisis in 2022.
That is according to the regulator's latest quarterly inflation report published by the NBU's press service on October 29.
"Private consumption will remain the main driver of 4% GDP growth in 2021-2022. In the recovery phase, the economy will require increased imports, in particular investment ones, so the current account of the balance of payments after the 'surplus' in 2020 will bounce to deficit," the regulator said.
Given the influence of economic recovery, the current weakening of the hryvnia (Ukraine's national currency), as well as raising the minimum wage, prices growth will accelerate somewhat. Inflation is expected to reach 6.5% in 2021, and 5% in 2022.
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The situation is also expected to improve on the labor market with reduction in the unemployment rate and an increase in both nominal and real wages.
"The unemployment rate after the jump to almost 10% in the second quarter is gradually returning to the neutral level. Ukrainians' incomes, after a short pause during the strict quarantine phase, have resumed their growth. Further economic recovery and rising social standards will facilitated this trend. The nominal salary will increase by 9% in 2020 and by 16% the next. The real one will grow by 6.2% and 9.5% respectively," the report said.
Due to quarantine restrictions imposed by the Cabinet of Ministers on March 12, 2020, Ukraine's GDP in the first half of 2020 (H1) declined by 6.5%, including 11% in the second quarter of the year.
The International Monetary Fund (IMF) says Ukraine's economy may see a 7.7% decline in 2020.
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The decline in Ukraine's GDP in the eight months of 2020 slowed to 5.8%, from 6.2% reported in January-July 2020.