The International Center of Policy Studies (ICPS) has worsened the forecast for GDP growth in Ukraine in 208 to 2.6%, GDP will fall in 2009 by 5.2% with further resumption of its growth by 1% and by 3.5% in 2010 and 2011 respectively, according to a press release of the ICPS. "ICPS has downgraded its economic forecast due to the sharp worsening of the export conditions and tough access to external borrowing both resulting from the deepening global economic crisis. In our initial forecast we expected GDP to grow, though at a slower pace, during the forecasted period. Now we foresee a much slower economic growth in 2008, a fall in 2009, stagnation with gradual recovery in 2010 and modest economic growth in 2011," reads the report.
Earlier, the ICPS forecasted 5.7% GDP growth in 2008, 4% rise in 2009, 5% rise in 2010 and 5.6% rise in 2011.
According to the release, the Ukrainian economy very quickly reacted the strengthening of the crisis in the international economy.
The key channels of the international crisis impact on the Ukrainian economy are its considerable openness and dependence on the foreign crediting, reads the report.
ICPS said that by the end of 2008, the hryvnia exchange rate will be UAH 6.7/$1, by the end of 2009 – UAH 7.7/$1, in late 2010 – UAH 7.5/$1, and in late 2011 - $7.3/$1.
"We expect the deepening of the crisis in the financial system and world's economy in 2009... The deepening of the crisis will cut Ukrainian export and allow tough access to foreign financing... Low domestic and foreign demand, the worsening of the financial state of companies, tough access to credit funds, the increase in the prices of imported equipment due to the hryvnia weakening and a rise in risks of investment in the conditions of uncertainty on the development of the economy would evoke a 15% fall in investment," reads the release.
