Archive 2015

  • Stabilisation is near but growth is far


    The economic situation in Ukraine in 2015 and 2016 will depend on progress in externally supported reform program and on stabilization in the Eastern Ukraine. Currently, we assume that there will be no escalation of military conflict but instability will continue until the end of 2016. Gross fixed capital investments will remain below or close to replacement levels within forecasting period endangering medium-term growth. At the same time, fiscal consolidation, decline in real wages and unemployment will cause reduction of real private consumption. Sharp hryvnia depreciation dragged down consumption and investments. Still, weak hryvnia helps to bring up nominal fiscal revenues and narrow of current account deficit. Overall, net real exports will positively contribute to real GDP growth due to lower purchasing power and imports substitution.
    To take into account higher than expected hryvnia depreciation and resulting inflation in the first quarter of 2015 the IER revised its forecast of real GDP. In particular, real GDP is expected to decline by 8.2% in 2015, and grow by 1.6% in 2016.

    Issue:  No.3 (90) March 2015

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