No GDP growth in 2014, Ukraine finance minister says

Ukraine’s Finance Minister Oleksandr Shlapak warned the public on March 12 not to expect any growth in real GDP in 2014. “We cannot count on growth,” he said, explaining that state spending cuts will have a negative effect on internal consumption while external markets do not portend considerable improvement. He also stated that inflation will exceed the previous government’s target. On a positive note, Shlapak said Cabinet reforms will improve the economy already by the year’s end.

Alexander Paraschiy: Shlapak’s take is in line with our vision. The economic problems are severe and we cannot build growth on such poor grounds. What’s more, the hryvnia’s decline, coupled with anticipated public spending cuts, will undermine private consumption. The Russian military invasion has undermined hopes for renewed investment activity anytime soon. Against this backdrop, it’s up to radical reforms by the Cabinet to enable the economy to revive gradually. Nevertheless, we anticipate GDP falling nearly 3% this year.