EBRD downgraded the forecast for the recession of the Ukrainian economy to 30%

The forecast for a decline in Russia's GDP remained at the level of 10%.But it may worsen if the scale of hostilities expands or if gas exports from RUSSIA are restricted.

The European Bank for Reconstruction and Development (EBRD) expects that the fall in Ukraine's GDP in 2022 could be 30%. The bank worsened its forecast for the country compared to March - then a fall of 20% was expected.

At the same time, according to the bank's forecasts, GDP growth in Ukraine will recover to 25% in 2023, but this suggests that significant restoration work will begin by then.

The speed of recovery will be affected by how long the hostilities last, as well as how the conflict is resolved and how many refugees return, the report said.

Russia's GDP in 2022 could fall by 10%, the bank warned. Thus, the EBRD kept the outlook for the country since March. The GDP of Belarus in 2022 will decrease by 4% - compared to March, the forecast was worsened by 1 p.p. In 2023, zero dynamics of Russian and Belarusian GDP is predicted.

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The EBRD stressed that all forecasts for this and next year are subject to serious downside risks in the event of an increase in the scale of hostilities or restrictions on the EXPORT of gas or other goods from Russia.

“The situation is even more worrying now, as the new rise in food and energy prices, caused by Russia's military actions in Ukraine, is further fueling inflation,” warned EBRD Chief Economist Beata Javorczyk.

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At the end of April, the Central Bank of Russia gave an official forecast for the dynamics of the Russian GDP in Russia. In 2022–2023, GDP may fall by 8–12.7%. The growth of the Russian economy will be possible only in two years, it can reach 2.5-3.5%. The Central Bank associated this trend with interruptions in production, a decrease in imports into the country and supply chain disruptions.

At the same time, the Central Bank predicted that consumer prices will grow by 18–23% by the end of 2022, but by the end of next year, inflation will slow down to 5–7%.

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Bloomberg, citing sources, said that the Russian Finance Ministry expects Russia's GDP to fall by 12% this year. One of the interlocutors of the agency noted that if this forecast comes true, then economic growth in the country in about ten years will be brought to naught. The Ministry of Finance denied this information, emphasizing that the authority of the ministry does not include the preparation of official macroeconomic forecasts.

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