Bloomberg News

Ukraine's 2012 Economic Growth to Slow to 3%, IMF Says

April 17, 2012

Ukraine’s economic growth will slow this year because demand for the former Soviet nation’s exports is “waning,” the International Monetary Fund said.

Gross domestic product will probably advance 3 percent in 2012, less than the government’s 3.7 percent forecast and last year’s 5.2 percent growth, the Washington-based lender predicted today in its World Economic Outlook report. Inflation may average 4.5 percent, compared with 8 percent last year, it said.

Ukraine’s economy is losing momentum as the euro area’s debt crisis trims demand for exports such as metals, which generate more than 50 percent of GDP. The economy grew 4.7 percent from a year earlier in the fourth quarter, compared with 6.5 percent in the previous three months, official data show.

Should Europe’s debt crisis escalate, Ukraine’s currency will come under pressure while the government may struggle to raise funding as capital outflows create large external financing needs, the IMF said. The current-account deficit will widen to 5.9 percent of GDP in 2012 from 5.6 percent last year before narrowing to 5.2 percent in 2013, it added.

The IMF sees GDP growing 3.5 percent in 2013.

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

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


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