World Bank sees Ukraine rebounding

5th October 2015, Comments 0 comments

The World Bank on Monday said it expected crisis-torn Ukraine's imploding economy to start recovering later this year and reach 1.0 percent growth in 2016.

The bank maintained its earlier outlook of a 12 percent economic contraction across 2015.

It also warned its projections depended on the government's ability to implement long-promised cost-and corruption-cutting measures instrumental to sustainable growth.

"We do expect recovery to start later this year. In 2016 we forecast GDP growth to be around one percent," the bank's regional director Qimiao Fan told reporters in Kiev.

The International Monetary Fund on Saturday said it saw Ukraine posting growth of two percent after shrinking by 11 percent this year.

Economists believe that the war-torn former Soviet country's output hit rock bottom over the summer as fighting in the separatist east calmed.

The decline in industrial production slowed to 5.8 percent in August compared to 13.4 percent the previous month.

The annualised inflation rate has also come down from its peak of more than 60 percent at the start of the year to 52.8 percent in August.

Ukraine has been riven by fighting since pro-Western protests toppled a Moscow-backed president in February 2014.

Russia annexed Ukraine's Crimea strategic peninsula a month later and later witnessed a pro-Moscow insurgency erupt across its neighbour's industrial east.

Russian President Vladimir Putin denies charges of either orchestrating or backing the revolt in order to undermine the pro-Western authorities in Kiev and keep Ukraine dependent on Moscow's goodwill.

A Friday summit in Paris between Ukranian President Petro Poroshenko and Putin that was also attended by the leaders of Germany and France ended with the sides apparently agreing that a February peace deal will not be fulfilled by its end-of year deadline.

This implies that Russia will keep control of a 400-kilometre (250-mile) stretch of Ukraine's porous eastern border in the conflict zone for at least a part of the coming year.

Ukraine finds this unacceptable and says no peace -- or economic growth -- can resume until its territorial integrity is restored.


© 2015 AFP

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