Forecasts for the hryvnia exchange rate
People's Deputy Nina Yuzhanina writes that businesses have downgraded their expectations for the hryvnia exchange rate. This is reported in the NBU report "Business Expectations of Ukrainian Enterprises" for the first quarter of 2024.
The average value of the exchange rate that respondents expect in 12 months is 40.44 UAH/USD. USD (in the previous quarter - 40.06 UAH/USD).
The share of respondents who predict that the hryvnia exchange rate will not exceed 40.00 UAH/USD in the next 12 months decreased. The share of respondents who predict that the hryvnia exchange rate will not exceed 40.00 UAH/USD in the next 12 months decreased from 55.4% to 46.0%.
In terms of inflation, managers of Ukrainian enterprises forecast consumer prices to rise by 11.0% in the next 12 months (in Q4 2023, businesses expected inflation of 11.3%, in Q3 - 14.8%).
The most significant driver of consumer price growth remains:
▪️ military actions (82.8% of respondents);
▪️ production costs (65.8%);
▪️ exchange rate factor (59.5%);
Tax changes in these expectations are still at 15.4%.
The MP suggests following the developments and recalled the Cabinet's intention to raise excise taxes on fuel.
"In addition, information has already leaked to the press that the government is preparing tax "surprises," although it had previously promised to do without them in 2024," the MP writes.
The International Monetary Fund is also not too optimistic about the stability of our national currency.
They suggest that in 5 years, the dollar may cost 54 hryvnias (World Economic Outlook, April 2024).
According to the IMF, the average annual hryvnia to dollar exchange rate will be:
♦ 2024 - 41.0 UAH/USD
♦ 2025 - 45.8 UAH/USD
2026 - 48.6 UAH/USD;
2027 - 50.4 UAH/USD;
2028 - 52.1 UAH/USD;
2029 - 54.1 UAH/USD.
Nina Yuzhanina reminds that the budget for 2024 includes a forecast exchange rate of 40.7 UAH/USD.
Between January and March, the dollar grew by an average of 2.6% against the hryvnia (from UAH 38 as of January 1 to UAH 38.99 as of April 1), which is already almost a third of the planned annual devaluation.
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