Ukraine expects 3% annual hryvnia depreciation in 2019-2021

2018/7/12 22:06:25

Analyst: “The ministry’s forecast looks quite optimistic, assuming an IMF loan tranche will be received, as well as other lending from IFIs, which in total should provide up to USD 3.3 bln.”


 

 

 

 

 

 

 

 

 

 

 

KYIV, July 12, 2018 - Ukraine’s Economy Ministry expects the Ukrainian hryvnia exchange rate at UAH 30.7/USD by the end of 2021, Concorde Capital informed clients today based on an Interfax-Ukraine news agency report that cited the ministry’s annual three-year economic forecast submitted to the July 11 Cabinet meeting. The ministry expects annual depreciation not to exceed 3.2% in 2019-2021, while the exchange rate at the end of 2018 is expected to be UAH 28.10-28.50/USD (vs. UAH 26.23/USD as of today).

 

With this exchange rate, Ukraine’s GDP is expected at USD 125.7 bln in 2018, USD 140.0 bln in 2019, USD 149.9 bln in 2020 and USD 163.6 bln in 2021 (vs. USD 112.1 bln in 2017). In real terms, Ukraine’s economic growth will accelerate from 3.0% yoy in 2019 to 4.1% yoy in 2021.

 

The ministry projects government borrowing at UAH 215 bln in 2018, which is 7% lower than the amount assumed by the state budget. The submitted forecast also assumes that natural gas prices for households will increase 18% in 2018.

 

Concorde analyst Evgeniya Akhtyrko added: “The ministry’s forecast looks quite optimistic, assuming an IMF loan tranche will be received, as well as other lending from IFIs, which in total should provide up to USD 3.3 bln. State officials are still trying to reach an agreement on natural gas prices at import parity, which would require hiking them significantly, a widely unpopular move. Should the government fail in securing the IMF tranche, the ministry’s economic forecast will be quite irrelevant.

 

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For more information, link here: www.concorde.ua 

 

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