Fitch expects Ukraine’s growth to slow, outlook remains stable

International credit ratings agency Fitch Ratings forecasts that the growth of the Ukrainian economy will slow in 2019.

“Fitch expects [Ukraine’s] growth to slow to 2.6 per cent in 2019, down from 3.2 per cent in 2018, due to tighter monetary and fiscal policies, weaker global demand conditions and commodity prices, and more moderate wage increases,” the agency said.

In addition, Fitch affirmed Ukraine’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at B- with a stable outlook.

Fitch expects Ukraine’s annual inflation to drop to 8.6 per cent in 2019, and decline to 6.2 per cent by the end of 2020.

Regarding the upcoming Ukrainian presidential election, the ratings agency believes that the next president will have limited space to alter the country’s economic policy or the implementation of Ukraine’s international obligations.

The agency notes that there remain significant risks to the implementation of the current stand-by agreement with the International Monetary Fund (IMF), with the presidential election posing “a source of risk for smooth progress under the IMF programme and timely external market access.”

Fitch also forecasts that Ukraine’s current account deficit will increase to 3.5 per cent of the GDP, with the general government deficit estimated at 2.3 per cent of the GDP in 2019.