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The National Bank of Ukraine has worsened its forecast for the economy in 2015, expecting a fall in GDP of 11.6% compared to previous decline of 9.5%, but, at the same time, it is expected the slowdown in consumer inflation to 44% at the end of 2015 and to 12% at the end of 2016, according to the website of the regulator.
According to the data, the deterioration of the forecast is caused by the lack of significant progress in restoring control over the Donbas conflict zone, worsening terms of trade for Ukraine, a significant decline in exports to Russia, tight fiscal and monetary policies. However, the NBU expects renewed growth in real GDP in 2016 and forecasts the GDP growth of 2.4%.
At the same time, the National Bank has improved the outlook for inflation and it expects the slowdown to 44% at the end of 2015 and to 12% at the end of 2016. The improved forecast is due to the relative stability in the foreign exchange market and the consequent reduction of the residual effects of the devaluation of the hryvnia. A tight monetary policy also helped to improve the forecast, as well as the reduction of prices on the world food and commodity markets, and weak economic activity.
As UNIAN reported earlier, the fall of Ukraine's GDP in Q2 of 2015 slowed to 14.6% in annual terms, after tumbling 17.2% in Q1.
The Cabinet of Ministers is considering three scenarios for the development of Ukraine's economy in 2015, according to which the fall of the country's GDP is expected to stay between 11.9% to 5.5%.
According to the forecasts of the International Monetary Fund, the European Bank for Reconstruction and Development and the World Bank, Ukraine's GDP in 2015 will drop by 9% in 2015.