• 18/04/2024 03:36

In the coming months: the IMF has updated the negative scenario for Ukraine

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The IMF has updated its forecasts for the Ukrainian economy, presenting two scenarios: baseline and negative.

About This information is reported in the Memorandum with the IMF, URA-Inform reports.  

According to the negative scenario, it is assumed that due to the intensification of the war, the shock to the Ukrainian economy will begin in the second quarter of 2024.

«In line with the IMF's policy of lending under exceptionally high uncertainty, staff updated the downside scenario based on the assumption that war will be more intense in 2025», — the report notes.

The negative scenario assumes that the war will end by the end of 2025, compared to the end of 2024 in the base scenario.

«This will lead to a sharp decline in real GDP 4% in 2024 (compared to 3-4% growth in the base case) and zero growth in 2025», — says the document.

The IMF's baseline scenario is unchanged and assumes lower inflation.

In the IMF's downside scenario, intensifying military activity has a major impact on the economy, affecting household sentiment, the pace of migrant returns, and resulting in infrastructure damage from strikes.< /p>

Given persistently high defense spending and a decline in economic activity, the budget deficit will continue to rise in 2024-2025 and then gradually decrease, as noted in the report.

«Imbalances in the foreign exchange market will again emerge surface and are expected to persist longer given worsening export performance, leading to higher nominal depreciation in the coming years before it moves closer to the underlying trend», — the IMF forecasts.

Further recovery will be more limited than in the baseline scenario, given additional damage to capital stock and weakening balance sheets, leading to output significantly below pre-war levels.

Updated The cumulative downside-scenario financing gap is estimated at approximately $140.6 billion, exceeding the 2023-2027 baseline projection of $121.8 billion by approximately $19 billion, requiring additional measures to ensure debt sustainability.

< p>We recall that it was previously reported when Ukraine could receive reparations from the Russian Federation: the Ministry of Justice made an unexpected statement.

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