Experts disagree about impact of Donbas blockade on Ukraine's economy
The impact of the blockade of traffic with the uncontrolled territories of Donbas on the Ukrainian economy will definitely be negative, but the degree of influence depends on a number of accompanying factors, experts polled by Interfax-Ukraine believe.
"The economy [after the decision to suspend goods transportation through the contact line in Donetsk and Luhansk regions] is likely to face the risk of recession. In the second quarter of 2017 real GDP might fall compared to the first quarter in seasonally adjusted terms. If the blockade is not eliminated in the third quarter of 2017, the decline in real GDP will continue in July-September. If GDP falls two consecutive quarters, it means that the economy will go into recession," head of the research department of ICU Oleksandr Valchyshen said.
According to the expert, if the authorities use measures to stimulate the economy, it is likely that the dynamics of GDP by the end of this year will slow down to 0% from 2.2% last year.
Valchyshen also noted a high probability of increasing pressure on the hryvnia exchange rate.
"The authorities, including the National Bank, will have to choose whether to maintain the stable exchange rate by increasing the refinancing rate or support the economy. The issues cannot be done simultaneously," he said.
Head of the analytical department of Concorde Capital investment company Oleksandr Paraschiy has the opposite opinion.
"If we proceed from official statistics and the assumption 'all other things being equal,' we'll get exactly the figures the official sources indicate: the effect on the balance of payments will be minus $1.6-2 billion, the negative effect on GDP down to 2%, the negative effect on the U.S. dollar exchange rate up to several hryvnias. But this is theory, which has very little to do with the reality," the expert said.
According to his estimates, metallurgy is unlikely to be affected, however metal goods output might decrease by $1.3-1.4 billion given the down time of the enterprises located in the uncontrolled territories.
