The International Monetary Fund has revised its forecast for Ukraine's economic growth this year up to 2%, and expects its gross domestic product to increase by 3.2% in 2024, the Fund said on Tuesday.

The Fund said in its latest outlook that the increase was due to a stronger-than-expected growth in domestic demand as companies and households adapted to Russia's invasion, with inflation declining and foreign exchange markets stable.

Ukraine's economy shrank by about one-third last year following Moscow's Feb. 24, 2022 invasion and the Fund had earlier forecast a 3% shrinkage this year.

In almost 20 months of war, many soldiers and civilians have been killed, millions of people have fled abroad and exports from Ukraine's Black Sea ports have been blocked. Cities across Ukraine have suffered widespread destruction, and the power sector and other critical facilities have came under frequent Russian missile and drone attacks.

Despite that, industry and agriculture have proved resilient, and, with the help of foreign assistance, have adjusted better and recovered more quickly than initially expected, Ukrainian officials have said.

The government expects GDP to grow by about 5% this year and next. Preliminary government data showed GDP grew by 5.3% in the first nine months of 2023 compared with the same period a year ago.

The IMF, an important international lender to Ukraine, also said it expected inflation to slow to 17.7% this year and to 13% next year. Consumer price inflation reached 26.6% last year.

 

(Reporting by Olena Harmash; Editing by Timothy Heritage and Philippa Fletcher)