“In 2021 growth will exceed 5% mainly due to internal factors, but will be supported by external demand. As the European and world’s economy recovers in the second half of 2021, Ukrainian exports should increase in volume and contribute to growth”, — according to JP Morgan.
JP Morgan’s analysts predict a 7% increase in the NBU’s interest rate and a 7.5% increase by the end of the year. By 2022, this rate might be close to 9%.
Geopolitical instability and the worsening of the coronavirus situation are serious risks. According to the holding company’s report. In 2022, Ukraine will need higher interest rates to bring inflation down to 5%. Among the nuance that may obstruct are geopolitical events and Covid mass infection.
“As before, we believe that in 2021 the increase will exceed 5% mainly due to external factors, but will also be supported by external demand. As the European and world economies recover in the second half of 2021, Ukrainian exports should increase and contribute to growth”, — commented JP Morgan.
Analysts at J.P. Morgan note that the main downside to the 4% drop in GDP last year was a reduction in investment and stock levels. This year, however, the situation will improve significantly with the start of active vaccination, a tranche from the IMF, a series of international agreements with Europe and Asia, support of the United States, investing-in-ukraine/service-for-investors/business-process-optimization/" rel="dofollow">optimization of domestic policy of Ukraine and infusion of foreign investments for building a business on the territory of Ukraine. Replenishment of stocks will give a significant boost to growth, analysts think.
“Ukrainians performed well in the fourth quarter of 2020 and a strong increase in retail trade, which supports the view that consumption will be an important driver of growth this year”, — reported in J.P. Morgan’s statement.
Let us recall some forecasts of Ukraine’s GDP for 2021:
World Bank — 3.8
S&P Global — 4%
Fitch — 4.1%
Ministry of Economy of Ukraine — 4.6%.
“Forecast - stable”, — confirmed its opinion S&P Global.