Country Forecast Ukraine November 2017 Updater

Country Forecast Ukraine November 2017 Updater

  • November 2017 •
  • Report ID: 359053 •
  • Format: PDF


  • The Economist Intelligence Unit expects the government to serve out its term to 2019. Economic recovery, the attainment of a visa-free regime with the EU and pension increases could improve the government's low level of support.
  • The diplomatic, propaganda, economic and military conflict with Russia over the Donbas region looks set to endure throughout the forecast period (2018-22). The Minsk II agreement will not end the conflict in eastern Ukraine.
  • Prospects for an improvement in US-Russia ties in the short term have receded owing to new US sanctions against Russia. The EU will maintain its sanctions on Russia over our forecast period.
  • On October 25th the National Bank of Ukraine (NBU, the central bank) raised its policy rate by 1 percentage point (the first increase since March 2015), to 13.5%.
  • We estimate real GDP growth this year of 2.1%. In 2018 a managed slowdown in China and a fall in steel prices will trigger a deceleration, to 1.3% growth. We forecast average annual real GDP growth of 2.2% in 2019-22.
  • We estimate that annual inflation will average 14.5% in 2017, before falling gradually in 2018-22. The hryvnya depreciated against a strong US dollar in 2017. A drop in steel prices in 2018 will cause further currency depreciation.
  • We believe that the government budget will register a deficit amounting to 2.7% of GDP in 2017 and 2.4% of GDP in 2018. In 2019-22 we forecast that the budget deficit will average 2.1% of GDP. More progress on structural reforms will be needed to ensure the renewal of the IMF facility, which expires in 2019.
  • We estimate that the current-account deficit will narrow in nominal terms in 2017, to US$2.9bn (2.6% of GDP, compared with 3.7% in 2016). We believe that the current-account deficit will widen in 2018 because of a rise in global energy prices and a steep fall in steel prices. In 2019-22 we expect the current account to register an annual average deficit of 2.5% of GDP.


Loading...

We are very sorry, but an error occurred.
Please contact support@reportbuyer.com if the problem remains.