By KYIV. Jan 5 (Interfax-Ukraine) – Inflation in Ukraine in December may reach 28% year-on-year due to rising costs associated with electricity supply problems, according to the Main Results of 2022 report of the Institute for Economic Research and Policy Consulting.
"Inflation was 26.5% in November and may reach 28% in December due to an increase in business expenses for generators and fuel for them. In 2022, prices for fruits and vegetables grew the most due to the occupation of part of the south of Ukraine and fuel because of the cessation of gasoline production as a result of Russian shelling," the document says.
It indicates that the real GDP of Ukraine in 2022 decreased by an estimated 30-32%, including the agricultural sector decreased by 30% due to a drop in crop production and a reduction in livestock numbers.
It is noted that during the spring sowing season, 25% less land was sown than in 2021, primarily due to the temporary occupation of territories in the east and south of the country, as well as problems with access to fuel.
The agency also draws attention to the fact that in 2022 the deficit of trade in goods and services widened rapidly: in 11 months it amounted to $20 billion, which is 11 times higher than last year. This was due to a 29% reduction in nominal exports of goods and services, while merchandise exports fell by 34%. The reason for the decline in this indicator was the blocking of ports and the occupation of territories through which exports had previously taken place.
In addition, thanks to the large number of Ukrainians who went abroad, there was a boom in imports of services in 2022: it increased by 74% as a result of increased spending by Ukrainians abroad. As a result, the surplus in trade in services, which made it possible to partially compensate for the deficit in trade in goods, was replaced by a deficit, analysts said.
The report also notes that the state budget deficit, which has sharply increased due to the growth in defense spending, was financed, among other things, through the issue of the NBU: its direct purchase of war bonds amounted to UAH 400 billion, while only UAH 197 billion was received from the market placement of war bonds due to low demand for government bonds at the rates offered by the Ministry of Finance, while the repayment volume was higher: UAH 213 billion, $2.7 billion and EUR700 million.
