When the war is over. Optimistic and pessimistic economic scenarios for 2024

The Ministry of Economy of Ukraine in April consensus ahead indicated a deterioration of the forecast of economic growth in 2024. "For the current 2024 consensus evaluation compared to the previous slightly worsened. So, according to experts of GDP growth in 2024 is expected at 3. 6% (compared to 4. 2% as of October 2023). At the same time, such estimates for 2024 The year also retains some variability - from 2. 1% to 5%, " - said in a forecast published on the Ministry's website.

Focus interviewed experts on the main risks to the country's economy and major scenarios for the current year. It is important to understand that all forecasts are not one hundred percent realistic, as there is a great uncertainty related to the course of fighting. The fight against aggression of the Russian Federation is ongoing, and no expert is now able to provide a prediction that it can be fully implemented.

"The forecasts of restorative growth for both the current year and in the future are currently under the great influence of uncertainty, including the duration of hostilities and the volume and timing of international financial assistance," the Ministry of Economy consensus reads.

They emphasized that experts in their forecast scenarios have been divided into two groups: one group includes optimistic -minded experts, who proceed from the fact that the war will end in 2024; Another group of experts suggests that the war can last longer. That is, the optimistic forecast for Ukraine's economy is based on the assumption that in 2024 Ukraine will go to the negotiation process, which will stop the fighting.

"In the optimistic scenario, we are encouraged to negotiate, or we go to the negotiation process. Accordingly, we go out for some freezing To continue in 2025. Analytist Andriy Shevchyshyn. He adds that Ukraine's GDP is very variable now, because there is no clear understanding of how long the war will last.

The optimistic forecast for Ukraine's economy is based on the assumption that in 2024 Ukraine will go to the negotiation process, which will be terminated as the fighting will be terminated in the commentary of the focus Alexander Vesrytsin, Director of the Department of Analytical Research Raiffeisen Bank, is current hostilities in early 2025. "Because of this, we have a fairly optimistic view of economic growth in 2025, which can be accompanied by the initial phase of recovery.

However, the prognosis for the growth of the economy next year can be revised towards deterioration after increasing the likelihood of continued active fighting and in 2025," - The expert says. Thus, in consensus forecasting, the evaluation of economic growth of GDP in Ukraine in 2024 was deteriorated to the average value of 3. 6% in the year. The forecasts of economists are greatly influenced by the existing risks.

According to the consensus forecast, the leading position is the risk of "continuing the war in Ukraine". In addition, experts called the "large -scale wave of mobilization" among the main risks. High integral estimates during 2024-2027 have the risk of "the impossibility of full use in the economy of a large part of the territory that has been occupied and the devastating consequences of active fighting" and the risk of "free use of seaports of Ukraine and their free use".

The head of the ICU Macroeconomic Research Department Vitaliy Vavryshchuk adheres to the optimistic scenario. In his view, exports can be a significant growth driver by adjusting the work of the Black Sea corridor. That is why the economy will increase this year at an acceptable pace. "The two biggest restrictive factors today are volatile moods and business expectations, as well as the mass destruction of energy infrastructure," he says.

He adds that the destruction of energy infrastructure means that many energy -intensive enterprises will face the problem of electricity supply restrictions, which will have a negative impact on GDP dynamics. "Because of this, we reduce our economic growth forecast to 4. 1% from 5. 0% earlier," says Vavryshchuk.

Attacks on energy were added to experts of pessimism, because without stable energy infrastructure of the enterprise, Andrey Shevchyshyn will also indicate that the spring attacks of the Russian Federation on the energy of Ukraine significantly influenced the forecasts and moods. "Darling thermal generation, energy infrastructure, networks. Recovery is not very active, at least now. As we will go through this period, we do not know yet.

We understand that small capacities, gas -piston, gas turbine installations are needed," the expert says. The experts interviewed by focus are inclined to believe that forecasts in 2024 can continue to be revised towards the deterioration of economic growth. And all this because of the risks that exist as long as the war is in Ukraine.

Oleksandr Vesrycin noted that this year the economic growth forecast may be adjusted towards deterioration due to possible risks that have not been taken into account in previous models. "In particular, these may be risks associated with electricity supply due to damage to the energy system, attack on port logistics, deterioration of security risks, etc. However, on the positive side there is an increase in international assistance due to the approval of the US package.

But the balance of risks so far. It goes more to the possible deterioration of forecasts during the year, "he warns. In the consensus forecast of the Ministry of Economy, one of the main risks for economic development is "the weakening, delay or suspension of financial support of Ukraine from international partners, in particular reducing the amount of funding from the EU and the US (in particular as a result of the domestic political situation in partner countries).

" Focus surveyed experts agree that this risk is one of the strongest factors of influence. "This year remains urgent the risk of not" insufficient financial assistance ", but" the irrepressibility of its receipt ". That is, the risk that during a certain period of time during the year may be interrupted with assistance, which will make the government look for temporary sources of coverage Cash breaks and/or temporarily reduce expenditures on certain non -critical articles.

If the government does not agree with commercial creditors on its restructuring, "says Alexander Vesrycin. According to him, the main risks of budget underfunding are transferred to 2025, since in addition to the EU UkraineFacility program, there are no more approved programs from partner countries to support Ukraine. "This adds uncertainty about the budgetary parameters, which in turn can limit economic growth next year," - says Alexander Vericin.

Vitaliy Vavryshchuk says that total assistance this year will exceed $ 35 billion, including $ 7. 8 billion from the US and $ 5. 4 billion IMF credit. In his opinion, assistance from external partners will be reduced. Experts talk about the great need for restructuring part of Ukraine's external obligations. If lenders consent, there is no need to pay debt for Eurobonds and Varrantians for $ 4. 5 billion to facilitate the difficult state of public finances.

"There are now negotiations with creditors, as long as all analysts are optimistic, I think there should be information about the arrangements in July," says Andriy Shevchyshyn.

The transfer of frozen Russian assets to Ukraine could help the country improve the state of public finances, but as long as this issue is being done in the governments of partner countries against the background of the likely reduction of financial support for partners to Ukraine, it is extremely important to find resources to cover the budget deficit next year. "Of course, the most powerful source would be the frozen assets of the aggressor country.