Ukrainian ministry's macroeconomic forecast based on smooth devaluation of hryvnia to UAH 30.7 per dollar by end of 2021
The draft forecast of the economic and social development of Ukraine for 2019-2021, developed by the Ministry of Economic Development and Trade, is based on the basic assumption of a smooth devaluation of the hryvnia, which is no more than 3.2% per year, to UAH 30.7 per U.S. dollar (plus or minus UAH 2) by the end of 2021.
According to the document, which is included in the agenda of a government meeting on Wednesday, the hryvnia is expected to weaken from UAH 28.1 to UAH 28.5 per U.S. dollar (plus or minus UAH 1) by the end of this year, with further weakening to UAH 29.4 per U.S. dollar (plus or minus UAH 2) at the end of next year.
The worst-case scenario, built on the assumption that the situation in foreign markets may deteriorate, the hryvnia may weaken to UAH 31.6 per U.S. dollar (plus or minus UAH 2) by the end of next year and UAH 33.9 per U.S. dollar (plus or minus UAH 2) by the end of 2021.
Thus, the ministry's base-case scenario expects the growth of Ukraine's nominal GDP in dollars from $ 112.1 billion last year to $ 125.7 billion this year, $140 billion next year, $149.9 billion in 2020 and $163.6 billion in 2021.
Taking into account the ministry's forecast for acceleration of economic growth from 3% in 2019 to 4.1% in 2021, such nominal GDP indicators in U.S. dollars mean the need for payments on government warrants (GDP warrants, or the so-called Value Recovery Instrument, VRI) issued to restructure eurobonds in 2015.