Economists have downgraded the growth projection for Ukraine`s economy in 2016 by 0.1 percentage points to 1%, but improved projections of the economic growth in 2017 and 2018 to 2.9% and 3.6%, respectively, according to an updated expert consensus forecast compiled by Ukraine`s Ministry of Economic Development and Trade.
Experts have also improved inflation expectations for the current year and estimated that consumer prices in Ukraine will grow on average by 14% per year. Inflation is projected at 10.9% next year and at 6.9% in 2018, experts said.
The deficit of Ukraine`s consolidated budget in 2016, 2017 and 2018 is projected at UAH 60.1 billion, UAH 56.9 billion and UAH 74.4 billion, respectively, while public and state guaranteed debt are capped at UAH 1.812 trillion, UAH 1,930 trillion and UAH 2.063 trillion, respectively.
The inadequate pace of reforms implementation, low solvency of the real estate sector and weak lending activity by banks have been named as key domestic risks to the country`s economy this year.
Among the external risks identified by the experts are non-disbursement of the next loan tranche from the International Monetary Fund, external financing gap and restriction on access to international capital markets.
In this context, experts also pointed to additional risks associated with a slower recovery of the global economy against the backdrop of low prices on global commodity markets and the reduction of investment programs or postponement of their implementation by international companies due to macroeconomic uncertainty.
As UNIAN reported earlier, Ukraine`s gross domestic product in the second quarter of 2016, when seasonally adjusted increased by 0.6%, as compared to the previous quarter, after a 0.7% decline.
In annual terms, the growth of Ukraine`s GDP in the second quarter of 2016 accelerated to 1.3% year-over-year, after an increase of 0.1% in the previous quarter.
The key creditor of Ukraine, the International Monetary Fund, forecasts GDP growth in Ukraine in 2016 by 1.5%, with inflation at 15.1%, the World Bank expects GDP growth by 1% with an inflation rate of 15%.