The Ukrainian Economy in 2023: Expectations and Current State

February 23, 2023
UkraineWorld spoke to Serhiy Fursa, an investment banker. Key points — in our brief, #UkraineWorldAnalysis.

1. On what to expect from the hryvnia exchange rate during the war

There is no pressure right now on Ukraine's currency thanks to Western support. At the moment, the National Bank of Ukraine is able to keep the hryvnia at its current pegs. Western support will continue until the end of this year. The only factor that would lead to the hryvnia depreciating is a request by the Ministry of Finance to allow it to fall in order to fund the budget.

2. On the Ukrainian economy state in 2023

The Ukrainian economy has fallen, but remains flexible. There is a lack of investment for recovery. The Ukrainian economy experienced a major shock in March and April 2022.

3. On the effect of sanctions on Russia

Sanctions, including the decision to enact price ceilings on two classes of Russian oil products as of February 5, will affect Russia's economy in the long term. It limits the financial resources that Russia has available to it.

4. On why the EU cannot completely "ban" the Russian banking system

This is most likely a result of some European countries continuing to buy Russian gas and needing to make payments, which is impossible without access to the Russian banking system.

Serhiy Fursa, an investment banker

This material was prepared with financial support from the International Renaissance Foundation.