IMF Lowers GDP Forecast For Ukraine.

The International Monetary Fund (IMF) downgraded its GDP-2005 forecast for Ukraine from 7% to 5.5%. However, the IMF improved GDP forecast for 2006 from 4% to 5%. Concorde Capital: Over Jan-Jul 2005, the GDP growth rate was more than three times less than it was during the same period of last year (13.5%). Continuing uncertainty about government policies have caused investment to become bogged down substantially (capital investments into the economy slowed to 8.5% yoy in 1H2005 vs. 32.2% in 1H2004). The contribution of net exports to the GDP have also declined: the trade balance fell to USD381 mln for 1H2005 vs. USD2.4 bln in 1H2004. The government now seems to understand that reaching its target GDP growth of 8.0% in 2005 is highly unlikely. In August, the Economic Ministry announced that it is going to lower its GDP forecast for this year from 8.0% to 6-6.5%. We are downgrading our GDP growth estimate for 2005 from 7.0% to 6.0%.