Ukraine central bank head projects 4.3% GDP decline in 2015

Ukraine’s GDP will decline 4.3% in 2015, said on Nov. 19 National Bank of Ukraine (NBU) Head Valeriia Gontareva during her address to fifth annual Ukrainian Investment Forum in Kyiv. “We estimate a 7.3% GDP decline this year and 4.3% contraction next year,” she said. The main reason for such pessimism is the current war in Donbas, a region which produced 15% of the nation’s industrial output, Gontareva said. Previously, the NBU expected a 9% GDP decline in 2014.

Alexander Paraschiy: The situation in the Ukrainian economy is really tough; however, we have a less pessimistic view on Ukraine’s GDP prospects (unless a large-scale war erupts). In fact, already this year we see a strong chance that GDP contraction will be close to 5% owing to the strong performance of the agricultural sector (Ukraine’s GDP fell just 3.8% yoy in 9M14).

In regards to 2015, we anticipate that next year the official statistics will count Ukraine’s GDP net of Donbas, which means that this region’s statistical effect will be irrelevant for GDP reports. So we are projecting minor GDP growth of 1.3% yoy for 2015.