The decline in real gross domestic product (GDP) of Ukraine in the third and fourth quarters of 2022 compared to the same period last year will slow down to 37.5% from 39.3% in the second quarter, the National Bank of Ukraine published such a forecast in the inflationary review on its website.

According to it, in the first quarter of 2023, the economy will also contract - by another 19%, given the base of the first quarter of this year, when the decline was 15.1%, and recovery will begin from the second quarter of next year.

In particular, in the second quarter it will be 17.5%, in the third - 13.2% and in the fourth - 12.3%.

In the inflation report, as the National Bank announced earlier, in general, this year, GDP is projected to decline by 33.4% and grow by 5.5% in 2023 and 4.9% in 2024.

Nominal GDP, according to the document, this year may be reduced to UAH 4.54 trillion from UAH 5.46 trillion last year. However, due to high inflation (31% this year, 20.7% next year and 9.4% in 2024), nominal GDP will reach UAH 5.99 trillion in 2023, and UAH 7.1 trillion in 2024, expects the National Bank.

"The baseline scenario includes a full-fledged resumption of the operation of the Black Sea ports of Ukraine from the beginning of 2023. In general, in 2023-2024, security risks will significantly decrease, but will remain relevant, which will lead to a low propensity for investment from internal and external private investors," notes the NBU.

The central bank adds that this basic moderately optimistic forecast also assumes continued active international financial support for Ukraine of $13 billion each in 2023 and 2024, compared to $26.8 billion this year (about $13 billion received so far). In particular, it is planned to successfully implement a new program with the IMF during 2023-2024, the possible volume of which was estimated by NBU Governor Kyrylo Shevchenko at $20 billion in a recent interview.

"The policies of the NBU and the government will be gradually normalized. The NBU will return to the traditional foundations of the inflation targeting regime with a floating exchange rate. Emission financing of budgetary needs will be gradually (from 2024) stopped," the National Bank said.