The economy will contract by 35% this year, while inflation will skyrocket, the report says
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Consumer prices in Ukraine may surge by more than 20% this year, according to an IMF forecast released on Tuesday. The fund also expects a significant slowdown in the country’s economy.
Ukraine’s GDP could shrink by up to 35% in 2022, according to IMF estimates. The expected 20.6% rise in consumer prices this year – a result of the ongoing military conflict – will come on the heels of a 9.4% inflation print in 2021. Ukraine’s GDP growth for 2021 came in at 3.4%.
While reaffirming its April assessment of “a forecast contraction of 35% in Ukraine in 2022,” the fund, however, refrained from making longer-term estimates for the country, citing “an unusually high degree of uncertainty.”
According to the IMF, the Ukraine crisis continues to affect the European region and is also pushing up food prices on global markets and causing “serious hardship for low-income households worldwide, and especially so in low-income countries.”
The report stresses that the conflict has led to a severe energy crisis in Europe, which is sharply increasing costs of living and hampering economic activity.
“More than a third of the global economy will contract this year or next, while the three largest economies – the United States, the European Union, and China – will continue to stall,” the IMF said.
The IMF’s analysts forecast global growth slowing to 2.7% next year, 0.2 percentage points lower than the July forecast, and anticipate 2023 will “feel like a recession” for millions around the world.