First figures show decline of Ukraine's economy slowing rapidly despite Russian invasion

The real GDP of Ukraine in the first quarter of 2023 decreased by 10.5% compared to the same period last year. In comparison with the last quarter of 2022, an increase of 2.4% was recorded, reported the Ministry of Economy with reference to the operational assessment of the State Statistics Service.

The Ministry indicates that the fall in GDP in annual terms was far from as strong as predicted (the forecast was at the level of minus 14.1%), which indicates the gradual adaptation of the economy to the war.

"Ukraine's economy is adapting and recovering at a faster pace than previously predicted. It continues to work and overcome the challenges of the war. And this is confirmed by the growth of seasonally adjusted real GDP in the first quarter of 2023 compared to the fourth quarter of 2022 by 2.4%," said Economy Minister Yulia Svyrydenko.

In the second quarter, positive dynamics of GDP is also observed.

Ukraine's GDP contracted by 29.1% in the first year of the full-scale invasion, with a 31.4% drop in the fourth quarter, in particular.

The National Bank of Ukraine predicts that the economy will recover by 2.0% in 2023. In the following years, growth will accelerate to 4.3% in 2024 and to 6.4% in 2025, but the main assumption of this forecast is a significant reduction in security risks from the beginning of 2024 thanks to the successful actions of the Ukrainian army.