IMF low­ers Ukraine’s 2015 growth pro­jec­tion to mi­nus 9%

The China Post - - WORLD BUSINESS -

The IMF said Sun­day it has low­ered its growth fore­cast for Ukraine’s war bat­tered econ­omy to mi­nus 9 per­cent, due in large part to “the un­re­solved con­flict in the East.”

The dis­mal pro­jec­tion — down from a fore­cast in April of mi­nus 5 per­cent — fol­lowed a two-week­long visit by an In­ter­na­tional Mon­e­tary Fund del­e­ga­tion to Kiev ear­lier this month.

In­fla­tion in Ukraine will hit an es­ti­mated 46 per­cent, of­fi­cials said, largely due to the sky­rock­et­ing price of oil and a large ex­change rate de­pre­ci­a­tion in Fe­bru­ary.

The Fund’s Ukrainian mission chief Niko­lay Gue­orguiev said in a state­ment sum­ming up the pre­lim­i­nary find­ings from the May 12-29 meet­ings, said the talks were “con­struc­tive.”

The IMF did see some en­cour­ag­ing signs of grow­ing sta­bil­ity, the Fund of­fi­cial said.

“In re­cent months, signs that eco­nomic sta­bil­ity is grad­u­ally tak­ing hold are steadily emerg­ing,” said Gue­orguiev.

“The for­eign ex­change mar­ket has re­mained broadly sta­ble. Gross in­ter­na­tional re­serves, although still very low, have in­creased to US$9.6 bil­lion at endApril. Banks’ de­posits in do­mes­tic cur­rency have been re­cov­er­ing,” he said.

The IMF last month made a risky new US$17.5 bil­lion loan to Ukraine af­ter eight failed pro­grams with the coun­try, stress­ing the gov­ern­ment was com­mit­ted to dis­ci­pline and re­form af­ter decades of gov­ern­ment mis­man­age­ment and cor­rup­tion.

Fund of­fi­cials have said that as re­cently as 2013 there was no will among Kiev’s lead­ers to un­der­take the re­forms needed to right its econ­omy — es­pe­cially to counter mas­sive cor­rup­tion — but that that ap­pears to have changed un­der its new lead­er­ship.

Nev­er­the­less, Ukraine’s econ­omy has been weighted down be­cause of the on­go­ing con­flict with pro-Moscow sep­a­ratists that has left more than 6,000 dead.

The strain of the war has emp­tied the gov­ern­ment’s cof­fers and run down its for­eign re­serves to a bare min­i­mum, putting it on track to de­fault on its huge debt load.

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