Ukraine will suffer one of the deepest recessions in years as the country's economy struggles to regain momentum following a turbulent year, the country's central bank chief said Tuesday.
National Bank of Ukraine Chairwoman Valeria Gontareva said gross domestic product will contract by around 7.5% this year. Earlier forecasts had put the decline in GDP at around 7%. She said inflation for next year is expected to remain high, at around 17%-18%, but below the 25% rate expected this year, the Interfax news agency reported.
"We got a country with huge accumulated macroeconomic imbalances and then there was the annexation of Crimea and a truly bloody war in the Donbas," she said, referring to the separatist-controlled region in the East.
The hryvnia has lost half its value against the dollar this year, but Ms. Gontareva said the national currency is likely to stabilize once assistance from the International Monetary Fund and other western financing sources arrives. She said she hopes the IMF will release the next three tranches of the $17 billion loan program at once after the next mission comes to Kiev in January.
"We're discussing significant increase of the amounts of aid from all international organizations and donors," she said. "That's why we're not expecting the hryvnia to keep depreciating, but we even expect it to strengthen as the situation stabilizes."
The crisis has drained the National Bank's reserves, which fell below $10 billion in November. But she said recent administrative restrictions on currency conversion would remain in place "as long as there is war and panic."
She blamed a recent spike downward in the currency to the sharp drop in the ruble in the last few weeks. The Russian currency was battered by the fall in oil prices, Russia's main export, and the impact of western sanctions imposed over the Ukraine crisis.
"As a person, I'm very glad to see what's happening with the Russian ruble, but as the head of the National Bank I cannot be joyful as Russia remains our important trade partner," Ms. Gontareva said. Russia accounts for about 20% of Ukraine's trade.
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(END) Dow Jones Newswires
December 30, 2014 08:10 ET (13:10 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.[/quote]
I think it was this that caused the peak.
National Bank of Ukraine Chairwoman Valeria Gontareva said gross domestic product will contract by around 7.5% this year. Earlier forecasts had put the decline in GDP at around 7%. She said inflation for next year is expected to remain high, at around 17%-18%, but below the 25% rate expected this year, the Interfax news agency reported.
"We got a country with huge accumulated macroeconomic imbalances and then there was the annexation of Crimea and a truly bloody war in the Donbas," she said, referring to the separatist-controlled region in the East.
The hryvnia has lost half its value against the dollar this year, but Ms. Gontareva said the national currency is likely to stabilize once assistance from the International Monetary Fund and other western financing sources arrives. She said she hopes the IMF will release the next three tranches of the $17 billion loan program at once after the next mission comes to Kiev in January.
"We're discussing significant increase of the amounts of aid from all international organizations and donors," she said. "That's why we're not expecting the hryvnia to keep depreciating, but we even expect it to strengthen as the situation stabilizes."
The crisis has drained the National Bank's reserves, which fell below $10 billion in November. But she said recent administrative restrictions on currency conversion would remain in place "as long as there is war and panic."
She blamed a recent spike downward in the currency to the sharp drop in the ruble in the last few weeks. The Russian currency was battered by the fall in oil prices, Russia's main export, and the impact of western sanctions imposed over the Ukraine crisis.
"As a person, I'm very glad to see what's happening with the Russian ruble, but as the head of the National Bank I cannot be joyful as Russia remains our important trade partner," Ms. Gontareva said. Russia accounts for about 20% of Ukraine's trade.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
December 30, 2014 08:10 ET (13:10 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.[/quote]
I think it was this that caused the peak.
