Growth or decline: the budget of the 2018 took into account three scenarios of development of economy of Ukraine

The forecast of economic and social development of Ukraine to 2018, based on which was built the draft budget for 2018 was developed by the Ministry of economic development and trade of Ukraine according to three scenarios. It is stated in the explanatory note to the draft law to the state budget of Ukraine.

The basis for the calculation of indicators of the draft state budget for 2018 was selected Scenario 1, which provides:

  • real GDP growth of 3%, the increase in nominal GDP to 3.25 billion UAH;
  • consumer inflation at 7%, the growth of producer prices – 9%;
  • average monthly wages are – 8 629 hryvnia, the increase in real terms of 10.9%;
  • export growth of 7.3% to 54.4 billion dollars, imports – by 8%, to 61.8 billion;
  • the growth of the investment component of GDP (gross fixed capital formation) by 15%, direct foreign investments level 3 – $ 3.5 billion.

Scenario 2 is more optimistic than the baseline forecast. In most same with the first scenario indicators, it is projected a strong growth of GDP – by 4%. In this regard, it is expected and the rapid growth of social standards and falling unemployment. More accurate calculations in the explanatory note to the draft state budget for 2018 is not given.

The most pessimistic is Scenario 3. It is built on assumptions about the unfavourable external economic environment and provides economic slowdown to 1.2 percent in 2018.

In turn, this scenario assumes higher rates of growth of both consumer prices and producer prices of industrial products, resulting in the forecast level of nominal GDP is higher than under Scenario 1.

Recall that today, September 18, was published the text of the draft state budget of Ukraine for the year 2018. The document was tabled in Parliament on 15 September, the latest allowable by the legislation. The Cabinet promises not to withdraw the bill from Parliament.