New numbers confirm what Ukrainians have felt for months already – the economy is at a standstill. Inflation is hovering around zero, salaries are stagnant and the only successful investments are those that have political backing. Once again Ukrainians are seeing their country succumb to the global crisis, with no growth expected this year, even as their biggest trade partners – Russia, Poland and Germany – continue to push forward.
Yet the receding tide is pushing down all boats. A recent International Monetary Fund report dispelled hopes of revival in 2013, lowering global gross domestic growth forecasts to 3.6 percent, slightly above this year’s 3.3 percent estimate, adding that risks of further slowdown were “alarmingly high.”
Aside from Europe’s never-ending debt woes, the main brake will likely be a cooling down of Asia, particularly China. This has already impacted commodity prices that are so critical to Ukraine – metallurgy dropped 12 percent in August, compared to last year, according to estimates by Austrian Erste Bank’s research unit in Ukraine.