Economics

IMF expects Ukraine's GDP to fall by 5.5% this year

4 march 2015 | 17:30

There was a 6.9% GDP decrease in 2014, according to a draft memorandum between Ukraine and the IMF.

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The details of the Memorandum between Ukraine and the IMF have been published
The International Monetary Fund (IMF) estimated that Ukrainian economy had shrunk by 6.9% in 2014 and predicts a 5.5% fall this year.

This is stated in a draft Memorandum between Ukraine and the IMF signed by President of Ukraine, Prime Minister of Ukraine, Ukraine's Finance Minister and NBU's head, reports UNIAN.

The estimates correspond with the governmental estimates, formed during the preparation of amendments to the state budget for 2015.

"According to the IMF estimates, Ukrainian economic activity reduced by 6.9% in 2014. December indices show a protracted decline in the industrial production, retail trade turnover and construction," – says the Memorandum.  At the same time the unresolved conflict in eastern Ukraine also contributes to the uncertainty of an expectation. In this regard, the economic activity might reach a record low in mid-2015. But, as our reform policy gains momentum, confidence will start to recover, renewal work will be done, economic decline will be reduced to 5.5% by the end of 2015."

Read more: IMF may refuse to assist Ukraine in case of Donbas conflict escalation

The Memorandum notes that the IMF and the Ukrainian government intends to move decisively towards strengthening economic and financial stability in the country by implementing a broad and ambitious structural reforms, which should provide a better business climate, investment inflow and increase competitiveness. "In 2016-2018, as far as the economic and banking stability is restored and reforms are spread, we expect to recover and gradually build up economic growth rates, which should reach 4% in the medium term," – says the memorandum.

Earlier, it was reported that the Memorandum also establishes a single gas tariffs for the population, adjusted in accordance with the exchange rate.

Source: UNIAN

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