Government chief aims to establish military economy in Ukraine - Financial Times
Prime Minister of Ukraine Denys Shmyhal (kmu.gov.ua)
Ukraine needs to make a military economy in the future, taking Israel as an example, as Prime Minister of Ukraine, Denys Shmyhal, says in an interview with the Financial Times.
According to Shmyhal, Ukraine needs to focus its economy on defense and technology development, drawing inspiration from Israel's model.
He also believes that Ukraine can become an "energy hub" for Europe, given its reserves of natural gas. This, in turn, would reduce Ukraine's dependence on vulnerable ports in the Black Sea for grain exports.
Ukraine could strengthen its technological sector, as in drone production. Addressing the EU's concerns about corruption in the opaque state sector, Shmyhal assured that these issues are being handled.
Economic forecasts for Ukraine
The IMF raised its forecast for the country's real GDP growth in 2023 to 4.5% (the previous was 1-3%). However, it is expected that growth will decrease to 3-4% in 2024 as the war continues, with risks of worsening prospects remaining high.
In October, the National Bank of Ukraine (NBU) improved its forecast for real GDP growth in 2023 from 2.9% to 4.9%. The NBU predicts a 3.6% growth in real GDP in 2024 (compared to the previous forecast of 3.5%). According to the NBU's forecast, the expected reduction in security risks will contribute to accelerating economic growth to 6.0% in 2025 (compared to the previous forecast of 6.8%).
The government also anticipates a faster recovery of real GDP in 2023, projecting a growth of 5% compared to the previous forecast of 2.8%. The forecast for real GDP growth in 2024 was reduced to 4.6% in the second reading of the state budget, compared to the initial 5.0%, taking into account factors such as the assumed duration of the war throughout 2024, logistics limitations for seaports, and migration processes, among others.
