Standard & Poor's forecasts the Ukrainian economy will grow 3.5% in 2010 and 4% in 2011.
The agency said in a special report in the banking sectors of Russia, Kazakhstan and Ukraine that it expected inflation in Ukraine to be 13% this year before slowing to 9% in 2011.
S&P said it expected the Ukrainian economy to recover more slowly this year because its banking sector had suffered the most damage, and because unemployment was highest there among the three countries under review.
Unemployment is likely decrease from 18% in 2009 to 15% in 2010 and 10% in 2011, but the still-high level will curb growth in consumer spending, the agency said.
Lending to the private sector and non-financial government-related entities will decrease from 94.9% of GDP in 2009 to 86.8% of GDP in 2010 and 80.4% in 2011. At the same time, financial organizations will be able to reduce their contingent debt from 47.5% of GDP in 2009 to 43.4% in 2010 and 40.2% in 2011.
Ukrainian banking sector assets decreased by 4% and credits by 12% in 2009. S&P said the figures could have been worse if non-serviceable loans had not been prolonged. Lending is expected to grow 6%-8% in 2010, thanks mainly to partly foreign-owned banks.
The emergence in 2005-2008 of foreign investors, who control over 40% of the Ukrainian banking sector, has helped Ukraine to mitigate the effects of the financial crisis, S&P said.
