Bloomberg News

Ukrainian Economy May Expand 5% This Year, Central Bank Says

October 28, 2011

(Updates with central bank comment in second paragraph, hryvnia and bonds in final.)

Oct. 28 (Bloomberg) -- Ukraine’s central bank said the economy will probably expand this year at the fastest pace since 2007, helping sustain the national currency.

Gross domestic product may grow as much as 5 percent in 2011 compared with the previous year, Ihor Shumylo, the head of the central bank’s economic department, said today at a conference organized by Fitch Ratings in the Ukrainian capital, Kiev. There are no “economic reasons for hryvnia devaluation,” he said.

The economy is picking up pace after an almost 15 percent decline in 2009 when the global slump cut demand for the country’s exports of steel and chemicals. Ukraine’s currency, the hryvnia, will trade near its present rate through year-end and in 2012, Shumylo said.

“We expect that even if economic growth slows down in the fourth quarter from the third quarter, a full-year GDP increase will be 4.8 percent to 5 percent,” Shumylo said, adding that nine-month growth reached 5.3 percent.

The economy surged 6.8 percent in the third quarter from the same period a year earlier, Shumylo said. On a seasonally adjusted basis, the value of all goods and services produced grew 3 percent in third quarter from the previous three months, he said.

The central bank expects the economy to grow 3 percent in the fourth quarter compared with the same period a year earlier, according to Shumylo. GDP will expand “at least” 4 percent in 2012, he said

The hryvnia was unchanged at 8.0035 per dollar at 3:18 p.m. in Kiev. Ukraine’s government dollar-denominated bonds due 2017 rose, sending the yield down 4 basis points, or 0.04 percent, to 7.786 percent, the lowest level in more than a month, Bloomberg data show.

--Editors: Paul Abelsky, Balazs Penz

To contact the reporters on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net; Kateryna Choursina in Kiev at kchoursina@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net; Claudia Carpenter at ccarpenter2@bloomberg.net


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