IMF predicts depth of Ukrainian recession

Economy to shrink 35% this year as inflation soars, report says

Consumer prices in Ukraine could rise 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 decline by up to 35% in 2022, according to IMF estimates. The expected 20.6% rise in consumer prices this year – the result of the ongoing military conflict – will follow inflation of 9.4% in 2021. Ukraine’s GDP growth for 2021 came in at 3 .4%.

While reaffirming its April assessment of “an expected 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 Ukrainian crisis continues to affect the region, driving up food prices on world markets and causing “serious hardship for low-income households around the world, and especially in low-income countries”.

The report points out that the conflict has led to a serious energy crisis in Europe, which is sharply increasing the cost of living and hampering economic activity.

READ MORE: The IMF and the World Bank are sounding the alarm over the recession

“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 stagnate,” says the IMF.

IMF analysts expect global growth to slow to 2.7% next year, 0.2 percentage points lower than the July forecast, and project that 2023 “feel like a recession” for millions of people around the world.

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