The National Bank of Ukraine (NBU) revised downwards the assessment of the pace of real GDP of Ukraine for 2020 from 3.5% growth to 5% decline, while improving the expectations for its growth in 2021 from 4% to 4.3%.

"The adverse impact of the pandemic on the Ukrainian economy is expected to be relatively short-term, but strong. The quarantine has already affected business activity, consumption, and employment. A decrease in global demand has also limited export opportunities for Ukraine," the central bank said.

According to NBU estimates, the effect of these factors will be the most pronounced in Q2 2020.

"A gradual lifting of quarantine restrictions will allow the economy to recover in H2 2020. Loose fiscal and monetary policies will contribute to the economic recovery. An increase in budgetary spending by the government to overcome the crisis, along with the NBU's actions to support the banking system, will mitigate the negative impact the pandemic has on the economy," the NBU said.

The economy of Ukraine will resume growth at round 4% in the following years, the regulator said.