The National Bank of Ukraine (NBU) has confirmed the forecast for real GDP growth in 2017 at the level of 1.9%, adjusted for the effect of trade blockade with the separate areas of Donetsk and Luhansk regions, according to a central bank press release.

Previously the NBU projected GDP growth in 2017 at 2.8%. On March 21 the NBU in connection with the trade blockade with the separate areas of Donetsk and Luhansk regions and improvement of conjuncture in foreign markets revised macro indicators for 2017, in particular, worsening the forecast for the country's GDP growth to 1.9%.

"The deterioration of the forecast was due to the expectations that the blockade in the east of the country and the loss of production facilities by the enterprises located in the uncontrolled territories will lead to a decline in industrial production in certain sectors," the National Bank explains.

In addition, the central bank raised the forecast for the current account deficit in 2017 to $4.3 billion (or 4.4% of GDP) from $3.5 billion.

"The blockade will lead to a reduction in the export potential of the metallurgical sector and an increase in the demand for imported raw materials," the bank said.

At the same time, the NBU expects real GDP growth in 2018-2019 to accelerate to 3.2% and 4% respectively. The current account deficit in nominal terms will remain at $4.3 billion, however it will be gradually declining relative to GDP to 4.1% and 3.7% respectively.