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The rating agency projects that Ukraine's macroeconomic situation will improve, and its economic growth will be between 2.3-2.9% by 2019 while inflation will drop to 9.5-7% by 2019.

The forex rate is expected to be UAH 27.2 per U.S. dollar.

"Ukraine's economy has returned to growth in the last two quarters, and we forecast real GDP growth of 1% for 2016 despite weak exports, ongoing security risks, the weak domestic business environment, and the need for fiscal prudence. We expect continuing growth over the forecast period; a pick up in the later years should lead to GDP growth averaging 2.3% annually between 2016-2019," the agency said in its Research Update on Ukraine.

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S&P Global Ratings confirmed Ukraine's sovereign rating at 'B-\B' with the stable outlook.

As UNIAN reported earlier, Ukraine's Cabinet of Ministers projects GDP growth at 1% in 2016 and at 3% in 2017. Inflation in 2017 is forecast by the Ukrainian government at about 8.1% while the forex rate is expected at UAH 27.2 per U.S. dollar.