The World Bank has improved its forecast for GDP growth in Ukraine, saying that the country’s economy will expand by 3.4 per cent in 2019 instead of its previous projection of 2.7 per cent, Open4Business Ukraine has reported.
The financial institution also revised its forecast for the next two years and now expects Ukrainian GDP to grow by 3.7 per cent in 2020 and 4.2 per cent in 2021.
The 2019 forecast coincides with the recently revised projections of Ukraine’s economy ministry.
“Next year, we expect growth to accelerate to 3.7 per cent [in 2020],” Ukrainian Deputy Economy Minister Sergey Nikolaichuk said, noting that 4.8 per cent growth is also possible next year under an “optimistic scenario.”
“If the new government is able to deliver on its ambitious reform goals, growth can increase to four per cent by 2021,” the World Bank’s analysts said in a report.
The main conditions to achieve and maintain such a growth level include reviving sound bank lending to the private sector by reforming state-owned banks, attracting private investment into tradable sectors, demonopolising key sectors and strengthening antimonopoly policies, privatising state-owned enterprises, tackling corruption, as well as rebuilding international financial reserves, amongst much else.
However, if the political reforms do not move forward and the corresponding finances for the reforms are not secured, GDP growth in Ukraine could fall below two per cent, the World Bank’s analysts warned.
On October 18, the International Monetary Fund said that it expected Ukraine to maintain a close-to three per cent growth rate in the next years.