The Cabinet of Ministers has worsened the forecast of Ukraine’s GDP growth in 2023 to 3.2%

According to the draft state budget for 2023 for the second reading, inflation next year will be 29%

The Cabinet of Ministers approved the draft state budget for 2023 for the second reading, according to which the GDP growth forecast of Ukraine for 2023 was worsened from the previous 4.6% to 3.2%. Prime Minister of Ukraine Denys Shmyhal reported about it on his Telegram channel.

“The government approved the draft budget for 2023 for the second reading, taking into account the proposals of the people’s deputies. Now we are waiting for a quick vote on the draft budget in the Verkhovna Rada,” he said.

In addition, the Cabinet of Ministers reduced the forecast of inflation in 2023 – from the previous 30% to 28%.

The 2023 budget is planned taking into account 1.3 trillion UAH in revenues. Thanks to the adjusted macro indicators and tax changes, the revenue part is expected to increase by more than UAH 50 billion.

Expenditures will amount to UAH 2.6 trillion due to an increase in expenditures for pension payments, liquidation of the consequences of the Russian Federation’s armed aggression, for scientific and technical activities, and preferential mortgage loans for IDPs. In general, by the second reading of the draft state budget, the expenditure part increased by UAH 66.8 billion.

“The number 1 priority – security and defense – remains unchanged. We are directing more than UAH 1 trillion to the fight against the occupiers, which is more than 18% of GDP. We are financing the Ukrainian army independently at the expense of internal resources,” commented Denys Shmyhal.

The state budget deficit next year is expected to exceed 20% of GDP. Covering the deficit is planned at the expense of the partners’ help.

“We need to attract $38 billion. We will get it from the EU, the USA, the IMF and other donors. We are moving in this direction and have every reason to count on progress,” the Prime Minister summed up.

As reported earlier, the deficit of the Ukrainian state budget in September 2022 increased to 76.6 billion UAH compared to about 5 billion UAH in July and August 2022. The increase in the deficit in September is associated with a decrease in external financing to $2 billion.

The NBU expects a fall in Ukraine’s GDP in 2022 by 32% compared to 2021. In 2023, the National Bank predicts economic growth of 4-5%. The inflation rate will reach about 30% in 2022, and 20.8% next year.