British intelligence predicts 3% economic growth for Ukraine in 2024

Ukraine's economy has remained stable despite the two-year Russian invasion, and there is a possibility of economic growth of 3% this year.

The Ministry of Defense of Great Britain reported that on the X social network.

"Despite Russia's attack on the Ukrainian energy infrastructure, it is quite likely that in 2024 Ukraine will see real economic growth at the level of about 3%," British intelligence experts believe.

According to the International Monetary Fund (IMF), this continues a recovery trend after Ukraine's economy contracted by about 29% in 2022, followed by real economic growth of 5% in 2023, the summary said.

The National Bank of Ukraine (NBU) has improved its annual inflation forecast to 8.2% for 2024 compared to 8.6% as previously forecast.

In March of this year, inflation in Ukraine fell to 3.2% year-on-year, strengthening the downward trend of inflation from a peak of more than 26% in 2022.

However, analysts note that inflation is likely to increase in the second half of 2024. The NBU predicts a weakening of the effects of last year's high harvest, a further recovery of consumption, and an increase in business expenses during the war.

The British Ministry of Defense notes that "the continued improvement of economic conditions in Ukraine almost certainly allowed the NBU to gradually lower the base interest rate."

Thus, at the end of April this year, the NBU lowered the base interest rate to 13.5% from 14.5%, set in March 2024, and below the wartime peak of 25%.

In April, the IMF predicted this year's growth of Ukrainian GDP by 3.2%.

It should be noted that British intelligence also analyzed the impact of the war on Russia's economy.

"The continuation of the invasion of the Russian Federation into Ukraine is highly likely to hurt the prospects of the Russian economy," noted British analysts.

Experts are convinced that the Russian economy is at risk of overheating because the Russian Federation is increasing defense spending at the expense of other areas.

Inflation in the Russian Federation was reported to have increased to 6% in September from 5.3% in August 2023, driven by rising consumer prices, including food and fuel. Higher inflation will almost certainly increase the cost of financing Russia's war against Ukraine.

In addition, British intelligence previously noted that the Kremlin is definitely putting pressure on the Russian Federation's budget; it has secreted a significant part of its military expenses.

Furthermore, British intelligence also believes that Russia is moving towards the ideals of the USSR: citizens are being compelled to provide unpaid labor for the sake of the war effort.