The WB has improved the forecast of growth of the Ukrainian economy

The world Bank has analyzed the dynamics of development of Ukrainian economy and a revised forecast.

The world Bank has improved the forecast on growth of economy of Ukraine in the coming years. This is stated in the presentation of the world Bank for Ukraine, presented on Tuesday, November 19.

According to the new forecast, the growth of Ukraine’s GDP in 2019 will amount to 3.6% (previous forecast was 3.4%). In 2020 the GDP growth will amount to 3.7% (previous forecast – to 3.7%). In 2021, the growth of the economy of Ukraine will amount to 4.2%, as before.

Also, the Bank said the reasons for the growth of the Ukrainian economy this year. It recalled that Ukraine’s GDP rose 3.6% in the first half of 2019, and in the third quarter by 4.2%.

As noted, the growth was driven by high yield and favorable conditions for growth of domestic demand, in turn caused by rising wages, pensions, and the receipt of remittances from abroad.

Strong growth in the first half of 2019 was driven by a high and early harvest of crops, and such sectors as wholesale and retail trade, Finance and transport. Value added in agriculture grew by 6% in the first half of 2019.

The presentation noted that the rapid growth of household consumption continued in the first half of 2019 (11.2%) and were supported by social benefits during the election cycle; as before, large sums of remittances from migrant workers; and the restoration of consumer credit.

As a result, domestic trade and transport has increased significantly, especially in the second quarter by 4.5% and 4.2% of, respectively, the growth Rate of value added in construction and financial sector in the first half of 2019 amounted to 23% and 11%, respectively.

At the same time, the growth of industrial production and investment remained weak, with declining industrial production by 0.2% and investment growth in fixed assets to 12 per cent, said world Bank experts.

“The level of investment in fixed assets at 20% of GDP remains insufficient for accelerating economic growth,” the review says.

Previously, the economy in the updated macroeconomic forecast has improved expectations of economic growth in 2019 from 2.8% to 3.5% in 2020 from 3.3% to 3.7%.

 

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