The military conflict in the Eastern Ukraine has escalated in the end of August and its resolution becomes more distant. This means that our assumption of the post-war stabilization in the last quarter of 2014 will likely not hold unless political solution will be found in the next weeks. Therefore, we expect that real GDP will most likely drop by more than 5% in 2014. Under pessimistic scenario real GDP contraction might be in a range of 8-10% or even exceed 10%.