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

5 march 2015 | 17:55

Ukrainian economy can shrink by 12% in the worst case scenario, while the prices can rise by 1.5 times.

The Ukrainian government has developed three scenarios of Ukraine’s economic decline in 2015
Ukrainian Cabinet has approved three possible scenarios for further economic situation development – optimistic, pessimistic and realistic.

The decision has been published at the official website of the government on Thursday, March 5.

According to the document, the optimistic scenario assumes a GDP fall of 5.5%, reaching UAH 1,850 trillion, and inflation of 26.7% by the end of 2015. This is the scenario agreed with the IMF and incorporated in the revised 2015 budget.

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A realistic forecast predicts GDP fall of 8.6%, while inflation will reach 38.1%.

The pessimistic forecast predicts a decline of 11.9%, while the inflation can reach a record 42.8%.

A nominal wage is projected at about UAH 3.990.

The fall in exports is projected at 7%, 11.9% and 14.6% in each scenario, respectively.  Import will decrease by 10.7%, 15.8% and 21.9%, respectively.

Expectations for the next two years are less murky. The Ukrainian Cabinet expects that the economy will fall by only 2.5-7% or even rise by 2% in 2016, while in 2017 it is likely to grow by 1-3,5% or fall by 3%.

Inflation will reach 9-14.4-16.4% in 2016, and – 7.7-8.9-9.7% in 2017.

Read more: US economy grows by decade record 5%

Recently, the PM Yatsenyuk named very the optimistic the expectations about the exchange rate and inflation laid down in 2015 state budget, noting that they would probably be revised at least one time.

Source: ZN.UA

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