GDP fall in Ukraine in 2014 will be 6.5% - forecast

Kyiv, May 22 (Interfax-Ukraine) - The fall of GDP in Ukraine in 2014 will be 6.5%, with inflation exceeding 15% due to the decline in domestic demand and exports to Russia, analyst for economic affairs of the International Centre for Policy Studies Oleksandr Zholud has said.

"We expect the fall by the end of this year to reach 6.5%, for the next year – the increase to reach 4%," he said, introducing a new center forecast at a press conference at Interfax-Ukraine.

The expert noted that the IMF expects Ukraine's GDP in 2014 to decline by 5%, and the EBRD - 7%.

According to Zholud, enterprises in the country in 2014 will not be able to compensate for the loss of the Russian market that will affect the economic dynamics, while the hryvnia devaluation, the rise in fuel prices and the increase in tariffs will accelerate the growth rate of prices.

Zholud also suggested that if the situation stabilizes the hryvnia rate might return to the level of UAH 11.00-11.50 per $1, while now it remains at about UAH 12.00 per $1.

According to the center, in 2014 for the first time since the crisis of 2009 private consumption will reduce substantially - by 10% year-on-year due to the reduction in real income and the deterioration of crediting conditions.