Ukraine may lose up to 1% of GDP over decrease of Russian gas transit

Ukraine may lose up to 0.6% of GDP in 2020 and 0.9% of GDP in 2021 due to the reduction transit volumes of Russian gas.

This is stated in the National Bank of Ukraine inflation report dated October.

In the framework of the base forecast scenario, it is supposed to reduce the volume of transit from 90 billion cubic meters in 2019 up to 50 billion cubic meters in 2020 and up to 30 billion cubic meters in 2021.

At the same time, NBU considers alternative scenarios, which provide for both higher and lower volumes of transit.

The Russian Federation is actively put into operation bypass gas pipelines, which in terms of total capacity are able to completely replace the Ukrainian gas transportation system in the coming years.

Ukraine receives about USD 3 billion a year due to transit gas, and its termination will not only lead to direct losses in foreign exchange earnings, but will also create risks for the activities of related sectors of the economy and for the provision of Ukraine’s own needs with gas.

As The Journalist reported, Ukraine’s Parliament adopted law on Naftogaz unbundling.