The European Bank for Reconstruction and Development (EBRD) has downgraded its outlook for Ukraine’s GDP in 2015 to 5%, compared with its most recent estimate of 3% which was made in September, according to the EBRD’s latest economic outlook, published today in the bank’s "Regional Economic Prospects" report on Monday.

"Ukraine's economy remains in a precarious state. The death toll in the east of Ukraine has been rising despite the ceasefire. International reserves have declined to one month of imports, despite capital controls, and external financing needs are higher than estimated earlier," reads the bank's report Regional Economic Prospects.

The EBRD has noted that government debt has been rising rapidly as a share of GDP, and fiscal and quasi-fiscal pressures remain significant, while banking sector balance sheets have been subject to deposit outflows and currency depreciation. Various capital controls and administrative restrictions were introduced in Ukraine to halt the further depreciation of the hryvnia. This has led to the emergence of a de facto dual exchange rate market, the bank said.

"The energy security remains a serious issue due to shortages of coal and uncertain longer term prospects of Russian gas deliveries beyond the October 2014 'winter package' deal. So far, the transit flow of gas to Europe through Ukraine has not been disrupted but a possible interruption of supplies during the winter season remains a source of concern," the EBRD experts said.

The experts said that Ukraine's economy needs to continue undergoing necessary, if painful, reforms with the support of the IMF program. However, material external refinancing risks, uncertainty about the volume and timing of international financial assistance, and damage to infrastructure and production capacities in Donbas will all affect growth in 2015, resulting in continued recession," the bank said.

In Ukraine, real GDP is expected to fall by 5% in 2015 after a 7.5% fall in 2014.

The World Bank also changed its forecast for Ukrainian GDP. Its 2015 outlook has been downgraded to 2.3% from the 1% projected in October 2014, the World Bank said in its latest Global Economic Prospects.

Ukraine's state budget for 2015 rests on a forecast of the country's GDP fall by 4.3% and inflation of 13.1%.