J.P. Morgan has sharply downgraded its forecast for real GDP growth in Ukraine in 2021 from 4.5% to 2.3%, while maintaining its forecast for GDP growth in 2022 by 5%, according to the materials of the November EMEA Emerging Markets Research.

J.P. Morgan has sharply revised GDP growth for 2021 to 2.3% from previously expected 4.5%. They keep the forecast for GDP growth for 2022 at 5% and nominal GDP for 2021 at record $197 billion (from 2022 – at the level of $227 billion).

J.P. Morgan analysts point out that the preliminary estimate of GDP growth in Ukraine in July-September of this year at 2.4% in annual terms announced by the State Statistics Service was disappointing, as J.P. Morgan envisioned growth of 6.7% for this period, the National Bank expected 4%, and the consensus forecast provided for 3.6%.

At the same time J.P. Morgan admits the risk of weaker growth in the fourth quarter and, as a result, growth of 2% or less in 2021.

Analysts believe inflation peaked in October, but core inflation has yet to peak. Overall, in 2021 J.P. Morgan expects inflation at 9.4% and 8.3% in 2022. The current account deficit at the end of the year will amount to 1.2% of GDP, next year it will deepen to 2.3% of GDP. At the same time, analysts predict the state budget deficit in 2021 at the level of 3.9%, compared with 5.5% laid down in the law on the state budget for 2021.

J.P. Morgan expects the hryvnia exchange rate in October-December this year and in January-March 2022 will be at the level of UAH 26.3/$, in April-June next year – UAH 26.5/$, and in July-September – UAH 26.8/$.