Ukrainian Deputy Prime Minister Stepan Kubiv cut the government’s 2017 economic growth forecast to 1.8% from 3%, citing a trade blockade with separatist-held territories as one of the drivers for the revision.
The new forecast is just below the central bank’s revised prediction of 1.9%. Kubiv said growth for 2018 would likely climb to 3%, and to 3.6% in 2019. Since the start of the year, the blockade on rail freight from rebel-held eastern areas has prevented coal supplies from reaching Ukrainian power plants and the steel industry, whose exports are a keystone of the economy.
“The adjustment is based on a change in forecast price dynamics for key Ukrainian export goods, the halt in cargo transport across the demarcation line within Luhansk and Donetsk regions and also the adjusted IMF development forecasts for different countries of the world,” Kubiv said at a government meeting.
The central bank warned in March that the blockade could nearly halve growth in 2017. In its new economic forecasts, the government sees year-end inflation at 11.2%, higher than the previous forecast of 8.1%. (UNIAN/Business World Magazine)
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