Blow for Ukraine as World Bank lowers forecast

The World Bank has lowered its estimate for Ukraine’s gross domestic product (GDP) growth this year by 0.2 percentage points to 2.7 percent, according to the bank’s report unveiled last night.

The “Europe and Central Asia Economic Update, Spring 2019: Financial Inclusion” said that this year Ukraine’s economic performance will critically depend on sustaining the reform momentum to support investment and mobilizing adequate financing.

In 2019, the investment into Ukraine would be constrained by difficult external conditions and election-related uncertainties, resulting in high cost of external borrowing, the bank said.

The negative trends would be partially offset by the good performance of the services sectors and the strong domestic consumption, the bank said.

The World Bank projected that the Ukrainian GDP will increase by 3.4 percent next year.

Ukraine’s GDP growth hit a seven-year high of 3.3 percent in 2018, after growing 2.5 percent in 2017 and 2.3 percent in 2016.

The Ukrainian economy sank into recession in the first quarter of 2014 and suffered a consolidated decline of 16.5 percent in 2014-2015.