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IMF downgrades estimate of Ukraine's GDP growth in 2021 to 3.5%

KYIV. Oct 12 (Interfax-Ukraine) – The International Monetary Fund (IMF) has improved its estimate of Ukraine’s GDP growth in 2021 to 3.5% from 4% in its April forecast, according to the Fund’s World Economic Outlook (WEO) released on Tuesday.

According to the document, the IMF raised expectations for the growth of the Ukrainian economy in 2022 to 3.6%, while earlier this figure was expected at 3.4%.

As indicated in the WEO, the estimate of the average annual inflation in Ukraine in 2021 was increased from 7.9% to 9.5%, in the next – from 6.8% to 7.1%. Inflation at the end of the year, according to the document, will reach 10.2%, next year it will be 6%.

As reported, in 2020, the Ukrainian economy fell by 4% with an average annual inflation of 2.7%. In 2021, the Ministry of Economy expects growth of GDP by 4.1%, the National Bank of Ukraine (NBU) predicts 3.8% growth of GDP.

According to new estimates, Ukraine’s current account deficit is expected to be 0.7% of GDP this year, and will deepen to 2.4% of GDP next year, while in April the current account surplus was projected at 0.8% of GDP for 2021 and 0.9% for 2022.

The IMF has downgraded estimates of the unemployment rate for Ukraine. If in April the Fund estimated that this year unemployment would drop to 8.6% compared to 9.2% in 2020, and next year it was predicted to decrease to 8.4%, now the expectation of the unemployment rate for this year is 9.7%, and next year is 8.7%, according to WEO.