Moody’s bond rating service formulated the country’s risks very well: “Deterioration in the country’s institutional strength against the backdrop of poor policy predictability.”
If the government does not regain the confidence of financial markets, then the economic forecast will be downgraded. A positive outlook is based on the shaky assumption that global demand for Ukraine’s export commodities will increase in 2013. In fact, demand will be modest given difficulties still faced by major economies in the world.
Many firms will still work way below their capacity, having not recovered fully from the 2009 financial meltdown. Moreover, Ukraine’s manufacturing is gradually losing its competitiveness after so many years of weak investment activity.