IMF points at low pace of reforms in Ukraine

Goesta Ljungman, the IMF Resident Representative
in Ukraine, said on Feb. 19 that Ukraine has a large gap compared EU countries
in rule of law and the quality of its judiciary system, competition and its
regulation, and access to financing.

Ljungman said that in the best case scenario, if
Ukraine closes the key gaps and adopt most liberal farmland regulation, its
real GDP can grow at a 6% average rate in the next 20 years, Interfax-Ukraine
reported. Under the second scenario, with partial reform and keeping the
existing gaps, its average real growth will be 4%. Under the third scenario,
with a rollback of reforms, Ukraine will be growing at 1.5% rate. He also
stated that the current pace of reforms places Ukraine between the second and
third scenarios.

Alexander Paraschiy: Ljungman presented a simplified but overall correct
outlook of what Ukraine can expect in the mid- to long-term depending on the
speed of its reforms. But more interesting, the IMF representative hints that
Ukraine’s current reforms pace is between very slow and negative. Perhaps that
is an exaggeration, but it’s at least partially true, as Ukraine does not hurry
to adopt refomrs agreed upon with the IMF. In the year 2020, Ukraine’s real GDP
will grow between 3.5% and 3.7%, according to the forecasts of the central bank
and Economy Ministry, and very likely even slower in reality, which partially
confirms Ljungman’s statements.