Tuesday, November 29, 2011

Ukraine cuts GDP growth forecast 2012

World Economic outlook - Ukraine cuts GDP growth forecast 2012 : Ukraine, conceding that the global economic slowdown will have a major impact on its vital export industries, on Tuesday cut its forecast for economic growth next year to about 4 percent from an earlier estimated 5.5 per cent.

"Events of recent months are forcing us to switch to a more cautious scenario," Prime Minister Mykola Azarov told a business gathering. "We had expected GDP growth at about 5.5 percent next year ... (but) we are looking more at about 4.0 percent," he added.

Azarov's more modest assessment brings the Ukrainian government into line with that of the International Monetary Fund which viewed Ukraine's official outlook as unrealistic.

The ex-Soviet republic is hoping to secure a resumption of credit from the IMF under a $15 billion aid programme which was suspended at the beginning of this year after Kiev delayed structural reforms.

Ukraine's economy is dominated by steel exports, making it volatile to global demand fluctuations, and the European Union, which might be headed towards a recession, is one of its main export markets.

Analysts polled by Reuters this month said growth would slow to 4.1 percent next year from 4.6 percent seen in 2011, contrary to the government's earlier expectations of accelerated expansion.

Azarov's government is hoping for GDP growth of 4.7 percent in 2011 compared to 4.2 percent in 2010 which followed a disastrous fall of 15 percent in 2009.

But the European Bank for Reconstruction and Development has put this year's growth at 4.5 percent and at 3.5 percent in 2012.

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