NBU: GDP declines by 15% in first quarter

3 april 2015 | 11:02

The regulator expects the return of the economy growth of 2% at the end of the year. 

Economy shrinks by 15% in the first three months
The GDP fall has slightly accelerated in the first three months of 2015 – to 15% from 14.8% in the fourth quarter last year, according to NBU's report. In the next two quarters the decrease will slow down, and in the fourth quarter there will be growth for the first time since the end of 2013.

As regards to inflation, its growth fell in the last three months – to 10.2%.

The regulator comments that the level of economic activity will continue to decrease in the first quarter of this year, but will restore growth in the next few periods.

The NBU believes that export levels will begin to recover from the second quarter due to weak currency. The National Bank adds that the level of imports will remain relatively low due to weak currency.

The consumption will continue to decline due to a significant reduction in real wages (18.6%), higher unemployment, lower lending activity and tight fiscal policy, according to the regulator.

The bank predicts the growth of investments beginning from the second quarter this year, stressing that the expectation is based on ceasing the conflict in the Donbas.

Read more: Ukrainian Cabinet admits GDP might decrease by 11.9% in 2015 according to pessimistic scenario

"The escalation of hostilities in the Donbas is the main risk for the forecast. Therefore, the distribution of risks for GDP will be also asymmetric," – says the report.

According to the State Statistics Service, Ukraine's GDP dropped by 6.8% in 2014. The state budget of Ukraine for 2015 is based on optimistic scenario of the situation, thus predicting a GDP fall of 5.5% with inflation reaching 26.7%.

Source: ZN.UA

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