Adviser to the President of Ukraine on Economic Affairs: “Expect GDP growth to be more than 4% in 2021”

Friday, April 9, 2021
Adviser to the President of Ukraine on Economic Affairs: “Expect GDP growth to be more than 4% in 2021”

On April 7, Oleg Ustenko, Adviser to the President of Ukraine on Economic Issues, announced on channel 24 the details of negotiations on signing a preliminary agreement on the extension of the program of cooperation of Ukraine and IMF.

“Staff level agreement is such an agreement that is signed beforehand between all parties, in this case between the state of Ukraine and the IMF. This is a preliminary agreement on how the programme will be structured. Yes, we are awaiting the signing of this preliminary agreement — staff level agreement, which was mentioned by the Minister of Finance», —  confirmed Oleg Ustenko.

Referring to information published on the official website of the President of Ukraine, negotiations between the Ministry of Finance of Ukraine and the IMF take place in several directions. The main ones are discussion with the State Budget Preparation Fund for next year, reduction of the budget deficit and debt burden in the following years.

Oleg Ustenko also shed light on the Ukraine-IMF negotiating process on reforming the judicial architecture and supporting the anti-corruption system: "This is more than important from the point of view of the country’s economic growth". According to Oleg Ustinko, the IMF’s forecast of GDP growth in Ukraine is 4 percentage points less than that of the state budget for 2021.

"The government budget is set at 4.2-4.3% real growth. And President Zelensky says we need to grow from 5% per year. Because it is such growth that effectively combats poverty", —  noted the Presidential Advisor.

According to Ustenko, thanks to an increase in domestic household consumption and an increase in minimum and average wages, Ukraine’s GDP growth in 2021 is possible. This resource will become available, including through the Affordable Credit Program "5-7-9%", mortgage lending and NBU interest rate reduction. Investment by the IMF and a positive global economy will have a positive impact on the Ukrainian economy.

"Therefore 4% is the basic forecast. But we expect that growth will be higher", — said the advisor of Vladimir Zelensky.

Technical consultations between the National Bank of Ukraine and the IMF on monetary policy are also continuing. In an interview with Interfax Ukraine, the head of the National Bank of Ukraine, Kirill Shevchenko, stated that Ukraine can count on two tranches of the International Monetary Fund: "The main assumption of our macro-program remains the continuation of cooperation with the IMF. Given the longer duration of the negotiations, we can aim for two tranches".

"The point of institutional strengthening of the National Bank is particularly important: President Vladimir Zelensky, representing Kirill Shevchenko as head of the National Bank, noted the importance of ensuring the independence of this institution. The National Bank has already taken the initiative — a bill under discussion, according to which those who sit on the National Bank Board, that is, are responsible for supervising the NBU’s activities, will not have the right to enter the management of the National Bank at a certain time, to have no conflict of interest", —  have told Oleg Ustenko.

"In addition, there is a discussion with the Ministry of Energy about issues related to our energy independence, energy market development — meaning both gas production and energy resources production", — said the adviser on economic issues Oleg Ustinko.

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