Cabinet forecasts GDP increase by 1% in 2015

After decrease of the GDP by 6.5% this year, the economy of Ukraine will begin to recover and increase by 1% the next year, reads the memorandum of the economic policy of IMF. It is expected that inflation will slow down from 19% in 2014 to 9% in 2015, according to the document.

The worsening of the forecast is connected with the situation in the east of the country. At that, the renewed forecast is based on the assumption that it will be able to settle the conflict in a relatively short period of time. In the case of continuing of the conflict in 2015, the GDP decline could amount to 7.3% this year and to 4.2% the next year, while the NBU gross reserves could decrease to US $8.6 bn at the end of 2014 and to US $4.4 bn at the end of 2015.

IMF reminds that in the end of April the decline of the GDP of Ukraine amounted to 5% this year considering the 16.2% inflation, while the economic growth was expected at 2% considering the 7.4% inflation.

As of the end 2014, the estimates of the hryvnia exchange rate were reduced from UAH 10.5/ S $1 to UAH 12.5/ US $1 and from UAH 11.5/ US 1 to UAH 13.3/ $1, as of the end 2015, according to IMF.

The GDP will increase by 4% considering the inflation decrease by 6.9%, while the hryvnia exchange rate will amount to UAH 13.4/ US $1 at the end of 2016, according to the macroeconomic forecast for 2016 prepared by IMF.