The National Bank of Ukraine has said that the risk of the global spread of the coronavirus could lead to a recession in the global economy and a significant slowdown in economic activity in Ukraine.
It is noted that a significant decrease in global demand, as well as reassessment by investors of the risks of developing countries, may adversely affect Ukraine’s foreign trade and complicate the attraction of financing.
The spread of coronavirus infection has had a limited and neutral impact on the Ukrainian economy. Ukrainian exports continue to grow, and a slight decrease in the prices for certain domestic exported goods was more than offset by a further increase in the physical volume of deliveries abroad.
At the same time, prices for Ukrainian imported goods, primarily for energy, are falling even faster than for exported ones.
At the same time, the Ukrainian currency market is responding to the uncertainty situation with the virus and increased turbulence in the financial and commodity markets with deteriorating moods and increased nervousness.
The National Bank clarified that economic activity and inflation in Ukraine have not yet been affected by coronavirus consequences such as lower prices and global economy cooling, easing monetary policies by central banks of the leading economies of the world, and measures introduced by governments of other countries aimed to prevent the spread of the virus.
In addition to falling prices on world markets, competitive wars between newly-developed oil producing countries will contribute to lower inflation in Ukraine. They will provoke support for record low energy prices, which will also affect the prices of Ukrainian exported goods.
In general, the financial regulator emphasized that all these factors will have a multidirectional effect on economic growth and inflation in Ukraine, which increases the uncertainty.
At the same time, the conclusion of a new IMF program will reduce the vulnerability of the Ukrainian economy in a period of turbulence in world markets during peak payments on public debt.
It is important to note that the attitude of investors to Ukraine will be influenced by decisions of Ukrainian courts regarding the responsibility and obligations of ex-owners of bankrupt banks.
As The Journalist reported, NBU set official forex rate to UAH 25,86 to dollar for March 13.
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