IMF, EBRD confirm Ukraine's GDP growth at 2% in 2017
The International Monetary Fund (IMF) and the European Bank for Reconstruction and Development (EBRD) have confirmed their forecast for growth of Ukraine's GDP by 2% in 2017, according to the surveys of the institutions published on Thursday.
The IMF expects that Ukraine's economy will grow by 3.2% in 2018 and the EBRD projects it at 3%, as they earlier said.
The IMF also confirmed its inflation forecast for Ukraine in 2017 at 10% and 7% in 2018. The fund slightly improved the assessment of the deficit of current account of Ukraine's balance of payment for this year to 3.6% of GDP from 3.7% of GDP projected after the fourth revision of the Extended Fund Facility (EFF) and to 2.9% from 3% of GDP for next year.
The EBRD said that Ukraine’s economy stabilized in 2016 and embarked on a moderately-paced recovery, driven by a rebound in domestic demand from the low base of the previous two years. However, foreign direct investment (FDI), bank lending and public infrastructure spending remained weak.
Commodities still account for a significant share of Ukraine’s exports, exposing the economy to volatility in commodity markets, the EBRD said.
The bank experts said that in the first quarter of 2017, Ukraine’s industrial production contracted by 0.7% year-on-year, affected by the cargo transportation blockade of the area that is currently beyond the control of the government of Ukraine. The blockade will weigh down on GDP growth and balance of payments in the near term.
The bank said that the combined general government and Naftogaz deficit stood at an estimated 2.3% of GDP in 2016, below the initially planned deficit target of 3.7% of GDP. In 2017, it is planned to widen somewhat to 3.0% of GDP.