The decline of Ukraine's GDP in Q1 2015 increase slightly – to 15% from 14.8% in Q4 2014, although in the next two quarters the decline will slow and in Q4 2015 Ukraine will see GDP growth for the first time since 2013, the National Bank of Ukraine (NBU) has said.

According to an inflation report published on Thursday, in Q2 2015 the GDP fall will slow to 10.2%, in Q3 2015 – to 5.7%, in Q4 2015 GDP will rise by 2%, and by the end of 2015 GDP will have fallen overall by 7.5%.

"The fall in the level of economic activity continued in 2014 and will be still seen in Q1 2015. The bottom will be reached and then it will gradually start to be restored," the NBU said.

The bank said that due to the large decline in imports, net exports this year would add 3.5% to GDP. The NBU said that exports will start recovering from Q2 2015 onwards thanks to the competitive advantages of exporters due to weakening of the national currency exchange rate. It also said that the real effective hryvnia exchange rate in February was 40.7% lower than a year ago due to the nominal devaluation of the effective exchange rate by 57.2%, with inflation of 25.7%.

The NBU said that consumption decline will continue in 2015 due to the fall in real wages (by 18.6% during the year), growth in unemployment, a decline of credit activity and the tough fiscal policy. The central bank said that consumption will extract 7.4% from GDP in 2015.

"Investment will start growing from H2 2015 thanks to the introduction of imports replacing production and the restoration of infrastructure destroyed in eastern Ukraine," the NBU said, adding that the forecast is based on the assumption that the conflict in Donbas will end.

"The escalation of hostilities in eastern Ukraine is the main risk to the forecast. Risk distribution for GDP is asymmetric: with the same likelihood GDP decline could worsen if the pessimistic scenario is realized," the regulator said.

The NBU said that inflation this year in annual terms, after a small increase in Q2 2015 to 38.6% from 35.6%, will start slowing: to 35.9% in Q3 2015 and 30.1% in 2015.

In 2016, inflation will slow to 13% and GDP will grow by 3%, the NBU said.