Economic Monitor Ukraine
WA 16 | August 2022
Russia`s full-scale war has been causing dramatic human, social, and economic suffering. GDP is forecast to decline by 32% yoy in 2022. Public finance is strongly hit. The budget deficit stands at USD 5 bn per month covered by NBU’s monetary financing and intern. support (grants and loans). Thereby, inflation has strongly accelerated and is expected to exceed 30% yoy in December. The NBU introduced a fixed exchange rate regime and capital controls to set a nominal anchor. A strong decline in reserves (USD 7 bn) necessitated a devaluation of the exchange rate in July. Russia’s blockage of seaports leads to a strong export decline, increased devaluation pressure, and has global implications.