The World Bank is sticking to its forecast for Ukraine's gross domestic product (GDP) to grow 1% in 2016, Qimiao Fan, World Bank Country Director for Belarus, Moldova and Ukraine has said.
He said that reforms in several directions are decisive for achieving the resumption of stable development in 2016 and subsequent years. A delay or the full stoppage of reforms would undermine the resumption of economic growth and result in negative social consequences, he said at the presentation of the new economic survey and macroeconomic forecast for Ukraine from the World Bank.
He said current political uncertainty is a serious threat for the country's economy.
According to the World Bank, Ukraine's economic growth will accelerate to 2% in 2017.
According to a press release, World Bank economists noted poverty growth in 2015. They anticipate that it will be also high in 2016 amid gradual resumption of economic activity.
Experts said the deficit of consolidated national budget, taking into account the deficit of national joint-stock company Naftogaz Ukrainy, decreased to 2% of GDP in 2015. This was accomplished by toughening control over consumption, increasing tariffs and the decline in the price of imported gas. They said that the situation with the budget in the future would remain complicated due to the reduction of the single social security tax.
World Bank experts recommend that Ukraine continue reforms aimed at achieving fiscal consolidation, strengthening the financial sector and supporting the flexible currency exchange rate.
Specialists said that labor efficiency should be improved and new jobs should be created via investing into infrastructure and improving the business climate. Unengaged opportunities in foreign trade should be used.
According to the World Bank, inflation in 2016 could reach 15% before slowing to 11% in 2017 and 8% in 2018.
