The Institute expects real GDP (including Crimea) to drop by 3.3% in 2014. Economic situation is expected to improve in 2015 under the assumption of successful reform implementation in 2014. The macroeconomic stabilisation package, which includes fiscal consolidation, will help to ensure real GDP growth in 2015 by 2.8%.
Major risk of the forecast is escalation of conflict with Russia, which will result in sharp increase in political uncertainty. The unwillingness of the Government to conduct reforms is another major risk. It will result in failure of the IMF program. As a result, Ukraine will receive only part of donors’ assistance, required for conducting reforms and financing some investment projects.
