UNDP engages with Economy Ministry in drafting macroeconomic forecasts

Within the implementation of a UNDP-led "Millennium Development Goals in Ukraine Project" UNDP experts have joined Economy Ministry in drafting macroeconomic forecasts. The event attracted over 40 representatives of the Ministry of Economy, Ministry of Finance, Federation of Trade Unions, State Committee of Statistics, National Bank of Ukraine, other state institutions and organizations, non-governmental research organizations, and international financial organizations.
Specifically, the meeting participants discussed the following issues and topics: the 2010 budget; a new coil of crisis or economic renewal in 2010-2011 in Ukraine: actions of power (structural reforms) and business (strategies of development); what rate of inflation will assist the economy’s way out of the crisis in 2010-2011? Monetary and fiscal policy of the National Bank of Ukraine and the Government. In addition, they talked about the medium-term dynamic till and beyond 2015 - reflecting on the completion and beginning of new cycles in the economy.
Experts noted on the positive dynamics of the economy in 2010 which will be supported by the external demand increase, taking into account resumption of growth of the global economy and of the leading countries, and by the improvement in foreign economic business environment for Ukrainian exporters (growth of the world prices in the separate goods markets – markets of metallurgical and chemical goods), and also by resumption of operations of the banking system.
The averaged value of the real GDP growth in 2010 increased by 1 per cent to 3.4%. Development of Ukrainian economy in 2011 will be characterized by activation of investment activities. The averaged value of the real GDP growth rate is equal to 4.7% (the variation of value from 3.3% to 5.8%) which is 1.3 percentage points higher than the forecasted value for 2010.
Forecasts were provided by the experts from the Ministry of Economy of Ukraine, Institute of Economics and Forecasting of the National Academy of Sciences of Ukraine, Economic Research Institute, Institute of Economical Research and Policy Consulting, International Monetary Fund’s Resident Representative Office in Ukraine, International Centre for Perspective Research, CASE Ukraine Company, Concorde Capital Investment Bank, Raiffeisen Bank Aval, BTA Bank, Dragon Capital and The Bleyzer Foundation.
Based on the materials provided by the organizations, macroeconomic forecasts in particular, the Ministry of Economy and the UNDP-led "Millennium Development Goals in Ukraine Project" produced a new edition of "Ukraine: Development Prospects - Consensus Forecast".
Forecasting allows reducing the level of uncertainty during decision making. But what is the probability that a forecast will come true? This year forecasting is has never been so risky.
For the first time, the term “forecast” was proposed in 1926 prominent Russian economist Nikolay Kondratyev in his paper “A problem of forecasting”. In his opinion, “forecast is a well-founded conclusion based on events that happened to possible events that are not given and has not happened yet.” Importance of this definition is that it describes the validity of the forecast and its source, the events that already happened.
A forecast gives a range of validated concepts about the future development of processes and events that are random but are reliable enough for taking decisions. A forecast offers alternative state of the future reality, based on the previous knowledge in a certain field.
Thus, a level of validity of a forecast determines its practical usefulness. The reliability of economic information, its adequacy to the reality defines if the conclusions and propositions made on their basis are correct and validated.