Real GDP remained flat in 2013 reflecting sharp increase in agricultural output in the last quarter of 2013. Real GDP growth in 2014 may be at 1.1% as slightly better prospects for other sectors of economy will likely offset impact of high statistical base for agriculture.
The State Budget Law for 2014 was finally approved but it likely underestimates fiscal gap due to overly optimistic revenue and privatization targets. Thus, access to external funding will be crucial this year.
The exchange rate will likely remain in UAH 8.4-8.8 range after hryvnia depreciated due to political instability. This projection is subject to assumption of the political stabilization and continued access to external funding from Russia or other sources.
