The Cabinet of Ministers is forecasting 1.7 percent economic growth in 2015 with inflation at 5.4 percent. Nominal gross domestic product will reach Hr 1.74 trillion, according to the budget resolution that the legislature, the Verkhovna Rada, drafted on April 22.
The optimistic figures, however, include Crimea
as part of Ukraine, states Oleksandr Parashchiy, head of research at Concorde
Capital investment house. He says growth could reach 2.3 percent in 2015 as
global trade recovers and the hryvnia devalues.
Unemployment could reach 7.8 percent next year – it stood at 7.6
percent as of October – the International Labor Organization calculated.
“I think, these figures are relevant for a peaceful
scenario,” says Dmytro Boyarchuk, CASE think tank analyst. The economy
will start growing by the end of this year, he adds. Another assumption is if
Ukraine conducts uninterrupted business with Russia because the European market
will not bring great benefits to Ukrainian producers in the short term.
However, “national currency devaluation will be a good
support for the exporters,” concludes Boyarchuk.
This year the Cabinet of Ministers sees nominal GDP reaching Hr
1.54 trillion, though it will probably be Hr 30-40 billion short of that target,
says Vitaliy Vavryshchuk, leading analyst for SP Advisors investment house.
That would explain why this year’s overly optimistic GDP assumptions could lead
to distorted figures for 2015.
The government expects the economy to drop by at least 3 percent
this year, while inflation could reach 12-14 percent. The World Bank has a similar
forecast, while the International Monetary Fund decided not to reveal any
figures about Ukraine’s economic future in the short term due to the ongoing
political tension instigated by Russia.
Moreover, the Finance Ministry expects an average hryvnia rate
at 10.5 to the dollar this year. The national currency lately has been at its
lowest level since its introduction in 1996.
The country’s financial situation remains tense as unrest
continues in eastern Ukraine. Kremlin-backed terrorists appear to be trying to
annex Donetsk, Kharkiv and Luhansk oblasts. The same scenario took place
earlier in Crimea, where Russia propped up an illegitimate government that
eventually led to its takeover.
Meanwhile, the International Monetary Fund is considering an $18
billion package bailout package for Ukraine, short of the $27 billion that
Ukraine’s government may get from the international creditors over the next two
years.
On April 14, the European Union approved a mid-term loan of
$1.38 billion and an additional $848 million in micro-financial aid for
Ukraine. The same day the U.S. agreed to provide a $1 billion loan guarantee.
Meanwhile, the World Bank plans to transfer $750 million in May.
Kyiv Post staff writer Vladyslav Golovin can be reached at [email protected].
