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Business

World Bank sees nine percent drop in GDP in 2009

Latest update : 2009-04-07

The World Bank has revised Ukraine's growth predictions, now foreseeing a drop of nine percent in GDP in 2009, as opposed to four percent previously. It warned that the figures could get worse if the government delays critical "anti-crisis" steps.

AFP - Ukraine's economy will shrink nine percent in 2009 amid the global economic crisis, the World Bank said Tuesday, and warned that government mishandling of the situation could make things worse.

"We expect GDP to drop by nine percent in 2009 but still see downside risks to this forecast if the external environment deteriorates further and/or the authorities delay critical anti-crisis steps," it said in a statement.

The crisis-battered former Soviet republic should see a recovery in 2010 with growth of one percent, it added.

"We project a slow recovery of one percent in 2010 and then acceleration toward a medium-term average between four and five percent starting in 2012," said the Washington-based international financial institution.

The nine-percent drop marks a drastic turnaround for once-flourishing Ukraine, whose economy, faltering badly towards the end of the year, still grew 2.1 percent for all of 2008.

Ukraine has been badly hit by the global economic crisis with a slide in the value of its currency and plunging prices for metals, its main export, which have caused thousands of layoffs in the country's industrial east.

The situation has been compounded by protracted infighting between President Viktor Yushchenko and Prime Minister Yulia Tymoshenko, which has cast doubt on Ukraine's ability to carry out an anti-crisis programme.

Last November, the International Monetary Fund promised the country a 16.4 billion dollar (12.8 billion euro) emergency loan package but full payment of the loan is contingent on whether Kiev can carry out the anti-crisis steps.

Date created : 2009-04-07

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