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Economy
Macroeconomic Framework
(Percent change, unless otherwise indicated)
2016 2017 2018 2019 2020 2021
Actual = Proj. — Proj. Proj. Proj. Proj.
Review SR Review SR
Real GDP 23 2.9 2.0 32 3.2 3.5 4.0 4.0
Inflation (eop) 12.4 10.0 10.0 7.0 7.0 6.0 5.0 5.0
General government balance 7 -2.2 -3.1 -3.0 -2.6 -2.5 -2.3 -2.1 -2.0
Public Debt ” 81.2 91.4 89.8 86.2 85.3 78.1 71.6 65.6
External current account -3.6 -3.0 -3.7 -2.6 -3.0 -2.4 -2.3 -2.9
GIR (eop, billions of U.S. dollars) 15:5 22.3 21.8 30.2 29.5 30.1 30.8 32.0
Months of next year's imports 3.4 47 4.6 5.9 5.8 5.4 5.2 5.0
Percent of IMF composite measures 61.9 83.9 82.0 105.3 102.4 101.3 101.8 102.4
Sources: Ukrainian authorities; and IMF staff estimates.
1/ Percent of GDP.
Following a severe crisis in 2014-15, the economy is growing again-by 2.3 percent
in 2016-and the flexible exchange rate and tight fiscal and monetary policies have
greatly reduced internal and external imbalances. GDP, which declined from its
peak of US$183 billion in 2013 to US$90 billion in 2015, is now recovering at a
growth above 2% and is expected to grow at 3.2% in 2018. Growth is projected at
3.5%-4% in the medium term (IMF).
The current account deficit fell sharply, from over 9% of GDP in 2013 to 3.6% of
GDP in 2016 and reserves-while still low-have more than doubled to US$17.6
billion (end of 2017 target at US$21.3 billion). The overall fiscal deficit-including
the energy sector’s quasi-fiscal losses, which had increased to 10 percent of GDP
in 2014, declined to 2.3% of GDP in 2016, supported by strong spending control
and the decision to raise energy tariffs to market levels.
Inflation has fallen steadily from its peak of 61% in April 2015 to 12.4% by end-
2016, well within the target range of the NBU. It is projected to reach 9% in 2017
and 5% in the medium term.
Ukraine has entered into a 4-year Extended Fund Facility (EFF) with IMF in
March 2015 for US$17.5 billion. Following the third review by IMF the fourth
tranche of US$1 billion was approved which would bring total disbursements
under the arrangement to about US$8.38 billion. The EFF aims to put the economy
on the path to recovery, restore external sustainability, strengthen public finances,
maintain financial stability, and support economic growth by advancing structural
and governance reforms, while protecting the most vulnerable.
The Ukrainian administration showed commitment to reforms by nationalising the
largest private bank, Privatbank, and liquidating over 100 banks within 3 years.
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