Ukraine’s GDP to decline by 12 percent in 2015, but 1 percent growth is possible in 2016, projects World Bank
Kyiv, October 5, 2015 – Despite a few encouraging signs of economic stabilization seen in July and August 2015, in its new Ukraine Macroeconomic Update the World Bank projects real GDP to fall by 12 percent this year, down from an earlier projected 7.5 percent decline. The macroeconomic policy mix adopted by the authorities proved to be effective in mitigating a much more painful impact on the country’s economy, but the on-going conflict in the east has made stabilization more difficult. Coupled with an unfavorable global economic environment, it has led to a much sharper contraction in the economy.
Ukraine’s economic recovery depends on whether the authorities continue implementing much-needed macroeconomic and structural reforms, even as periodic flaring up of conflict adds to uncertainties. If reforms continue, a gradual recovery is possible starting from 2016. It is expected to be driven by net exports, capital investment and privatization.
“The Ukrainian authorities have taken many important steps to stabilize and reform the economy, but they represent only a meaningful start of the long and arduous reform process”, said Qimiao Fan, World Bank Country Director for Belarus, Moldova and Ukraine. “Continued and faster reforms will help lay the foundation for future growth and they are crucial for Ukraine’s survival.”