Ukraine economy to shrink up to 9%: finance ministry

15th October 2014, Comments 0 comments

Ukraine's economy is likely to shrink by eight to nine percent this year due to the destroyed industrial infrastructure in the east, the country's finance ministry said Wednesday.

"The destruction by the militants of industrial enterprises in eastern Ukraine will lead to Ukraine not getting 8-9% of the GDP, though previously the most negative prognoses have been no more than 9%," the finance ministry said in a statement.

Ukraine is facing the bloody conflict with pro-Russian rebels in its industrial heartland to the east while already in a two-year recession, mostly due to troubles of its metals sector.

"The aggressors are methodically destroying the industrial facilities in Donbas," said the statement, referring to the separatists.

Ukraine is under pressure to implement radical reforms in order to receive crucial financial help from the International Monetary Fund.

Last week Kiev dispatched Central Bank chief Valeria Gontareva to meet with IMF boss Christine Lagarde in the hope of expediting the $17.1 billion (13.5 billion euro) loan.

The global lender warned last month that Ukraine may need an additional $19 billion in short-term assistance should the eastern campaign stretch through the end of the year.

Although Kiev had struck a ceasefire agreement with the rebels on September 5, the truce has proven largely ineffective.

© 2014 AFP

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