Figures released by the State Statistics Service on Oct. 30 reveal that the 45-million nation's economic decline in the third quarter was 5.1 percent in year-on-year terms, compared to 4.6 percent in the second quarter, amid war with Russia in the easternmost oblasts of Donetsk and Luhansk.
Taking the third quarter separately, it experienced a 2.1 percent
contraction over the second quarter. Performance of the Crimean economy is no
longer in the statistics since Kyiv lost the peninsula to the Russian
Federation in March.
The International Monetary Fund in Washington D.C. expects
Ukraine’s gross domestic product to drop by 6.5 percent this year
and to grow 1 percent in 2015, while the National Bank of Ukraine foresees 2014
contraction to be at 8.3 percent.
Analyst Timothy Ash of South Africa’s Standard Bank said the forecasts
might be reviewed as third quarter figures are better than expected. He called the
5.1 percent drop in GDP the “equivalent to growth in the Ukrainian
context” in an e-mailed statement to investors.
A few Ukrainians should find jobs as the unemployment rate should tip from
10 percent this year to 9.8 percent in 2015, according to the IMF.
Meanwhile, the consumer price index which reflects the value of the hryvnia,
the Ukrainian currency, is expected to grow by 11.4 percent this year and by 14
percent next year.
Finance Minister Oleksandr Shlapak said on Oct. 28 that the GDP decline
has hit bottom. “I have the impression that we reached a certain bottom…
We gained back 0.6 percent from the GDP decline during the ninth months,”
he said, “while GDP increased by around 4.5 percent in September compared
to August.” The minister noted that the change of the dynamics exceeded
government expectations. “We can speak about the return to the forecast of
minus 6.5 percent,” said Shlapak.
The National Bank, Finance Ministry and Economy Ministry used to release
their own macroeconomic forecasts, but currently the central bank has been trying to have it flow through its agency.
The news comes at a time when the global economy is pressured by the end of
the U.S. Federal Reserve bond buying program that was
reaching $85 billion a month at some point but was brought to zero on Oct. 30.
Known as “quantitative easing”, the cheap-money policy aims at
boosting the American economy that also drives global economic growth.
