The growth of Ukraine's gross domestic product (GDP) in 2013 will speed up to 4% from 2.5% in 2012, the European Bank for Reconstruction and Development (EBRD) reported in its updated Regional Economic Prospects bulletin.
The Bank also reviewed Ukraine's GDP dynamics for 2012: if the forecast given in January 2012 had 7% GDP growth in the fourth quarter of 2012 against the same period of 2011, the updated forecast is 3.6%.
"Ukraine's economy has been affected by the new wave of instability in the eurozone," reads the bulletin. "Lower external demand and subdued steel prices led to a contraction of the machine building and steel sectors. Several significant public infrastructure investments related to the Euro 2012 football championship are now completed. Agricultural output also slowed down, affected by the unusually cold winter."
The EBRD notes that Ukraine's economy is very much exposed to the eurozone, and developments in the EU would remain an important factor for the country's growth and economic stability in the months to come.
The EBRD also says that the Ukrainian authorities have maintained a tight fiscal policy in anticipation of large external debt payments later this year, although the recently adopted package of social expenditures may increase fiscal pressures.
As was reported with reference to the State Statistics Service, Ukrainian GDP growth in the first quarter of 2012 compared to the same period of 2011 slowed down to 1.8% against 4.7% in the fourth quarter of 2011, 6.5% in the third quarter of 2011, 3.9% in the second quarter of 2011, and 5.4% in the first quarter of 2011.
Ukraine's GDP in 2011 was 69.3% of the GDP level registered in 1990, up from 65.8% in 2010, but it was still lower than 74.2% registered in the pre-crisis year of 2008.
The Ukrainian government forecast 3.9% GDP growth while drafting the 2012 budget. At the same time, it predicts that GDP growth dynamics could hit 5-6% this year.
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