The European Bank for Reconstruction and Development (EBRD) has maintained its growth forecast for Ukraine's economy in 2023-2024, despite a sharp decline in GDP in the first quarter of 2023. The bank expects Ukraine's GDP to grow by 1% in 2023, followed by a 3% increase in 2024, according to an announcement made on Thursday.
In contrast, the EBRD revised its growth outlook for the region where it operates, including Central Europe and Central Asia. The bank expects GDP growth to slow down to 2.4% in 2023 from 3.3% in 2022. However, as inflation continues to decline, growth is expected to rebound to 3.2% in 2024. The May forecast for 2023 was adjusted upwards by 0.2%, while the forecast for the following year was revised downwards by 0.2%.
Similarly, the EBRD has updated its economic forecast for Moldova. The bank now predicts zero growth for Moldova's economy in 2023, followed by a rise of 3.5% in 2024. This is a change from the previous review issued last February when the EBRD projected a decline of 1.3% in Moldova's GDP in 2023 and an increase of 3.5% in 2024.
The EBRD noted that Moldova's economy continued to face challenges in the first half of 2023 following a significant economic downturn in 2022. The country's industry decreased by 7.6%, and agriculture dropped by 1%. However, stabilization of world energy prices led to a drop in annual inflation rate to 9.7% in August, enabling the National Bank to reduce the rate from 21.5% in November 2022 to 6% in June 2023.
The EBRD stated that Moldova's GDP is expected to remain flat in 2023 and then grow by 3.5% in 2024, supported by policy reforms in the context of EU accession and continued external financing. This outlook is slightly higher than the forecasts made by Moldova’s Ministry of Economic Development, the International Monetary Fund (IMF), and the World Bank, which predict economic growth of 2.5%, 2%, and 1.8% respectively for 2023.
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