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IMF raises estimate of 2023 GDP growth in Ukraine to 4.5%, warns of slowdown next year

Photo by Ira Huz / Unsplash

The International Monetary Fund raised its estimate of 2023 economic growth in Ukraine, saying the country shows "remarkable resilience" but warned growth is likely to slow in 2024 as the war continues.

A week-long IMF monitoring mission reviewing the fund's support agreements with Ukraine said gross domestic product is on track to grow by 4.5% this year, an increase from the IMF's earlier prediction of growth between 1% and 3%. Next year, though, growth will likely slow to between 3% and 4%.

"The Ukrainian economy continues to show remarkable resilience, and recent economic developments point to a stronger-than-expected economic recovery in 2023, with continued, albeit softer growth in 2024," the IMF said. "However, the outlook remains extremely uncertain as exceptionally high war-related uncertainty persists."

The statement comes as the IMF concludes a second review of its $15.6 billion Extended Fund Facility (EFF) for Ukraine, the lender's first loan to a country at war. The IMF team carried out the mission in Warsaw while the Ukrainian authorities met with the team partly in Warsaw and partly remotely from Kyiv.

Last week's mission recommended the IMF release the next tranche of the loan, about $900 million, but the recommendation is still subject to approval by the institution's executive board.

The EFF, approved by the IMF board in March, forms part of a $115 billion support package for Ukraine. The IMF completed a first review of the EFF in June, allowing the country to access the equivalent of $890 million for budget support.

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