14:22 11.12.2017

Ukraine's balance of trade to lose $500 mln from blockade of uncontrolled areas in Donbas in 2018

2 min read
Ukraine's balance of trade to lose $500 mln from blockade of uncontrolled areas in Donbas in 2018

Net negative effect of Ukraine's balance of trade from halting trade with uncontrolled areas in Donbas is estimated at $1.8 billion in 2017 and $500,000 in 2018, according to information presented by Deputy Governor of the National Bank of Ukraine (NBU) Oleh Churiy.

According to the presentation shown at a meeting with representatives of business organized by ING Bank and posted by the NBU, the favorable conditions for trade and a good harvest of grain in 2016-2017 allowed partially compensated the loss from the blockade for the country's balance of trade.

Churiy said that the deficit of 2017 would remain $4 billion in 2018-2019, gradually falling to 3% of GDP in 2019.

He said that activity of foreign investors today is hindered by high corruption and judicial risks.

The NBU said that Churiy pointed out the importance of Ukraine's cooperation with the International Monetary Fund (IMF) and the observation of its commitments. In 2019-2020 the country will pay the peak sum for foreign debt: if this year they account for some $3 billion, next year they would be around $4.5 billion and in 2019 they would reach $7 billion. This would suspend growth of forex reserves. According to the presentation, if next year they could grow to some $22 billion, in 2019 they would decline to $21 billion, and taking into account imports, the reserves would fall from 4.2 month of covering imports to 3.9 months.

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