ANKARA
The International Monetary Fund has forecast Ukraine's economic growth in 2015 to negative 9 percent, and projects inflation to reach 46 percent by the year end, the organization said in a statement late Sunday night.
It called the economic environment in Ukraine “exceptionally difficult” in part because of the unresolved conflict in the East, which took a heavier than expected toll on the economy in the first quarter of 2015.
"Inflation was mostly driven by one-off pass-through effects of the large exchange rate depreciation in February as well as the needed energy price increases," the statement said.
There were some positive developments. "The foreign exchange market has remained broadly stable. Gross international reserves, although still very low, have increased to $9.6 billion at end-April. Banks' deposits in domestic currency have been recovering," the statement said.
The IMF last month made a $17.5 billion loan to Ukraine, with conditions about economic reforms. The statement praised the government's reform efforts.
“The authorities recognize that decisive implementation of economic reforms is indispensable for entrenching financial stability and restoring robust and sustainable growth.
“They are committed to advancing fiscal consolidation and energy sector reforms, including further energy tariff adjustments to eliminate the large losses of [national gas supplier] Naftogaz, reduce energy consumption, and foster energy independence. They are also moving ahead with the rehabilitation of the banking system, and the improvement of the business environment to enhance the productive potential of the economy," the statement added.
