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World Bank cuts Ukraine growth forecast to zero

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(Globalpost/GlobalPost)

The World Bank on Monday cut its 2013 growth forecast for Ukraine to zero from one percent, stressing the dire need for energy reforms in the industrial ex-Soviet state.

In the second half of this year, the World Bank projects a slight increase in real gross domestic product (GDP) growth because of a good harvest and a low statistical base.

"Even with this improvement, given the decline in the first half of the year, (the) 2013 growth rate is projected to be close to zero percent," the World Bank said in its report.

It is the second time this year that the US-based institution reduced its 2013 growth forecast for Ukraine, having already cut it to 1.0 percent from 3.5 percent in April.

Ukraine's economy remained in recession in the second quarter of 2013, with GDP contracting by 1.3 percent, the fourth successive quarter of negative growth.

The World Bank highlighted the Ukraine's need to raise subsidised residential gas and heating tariffs, which is also one of the main demands on the country posed by the International Monetary Fund.

The IMF wants Ukraine to take unpopular measures to increase gas prices for the population as a condition for resuming a suspended $15.3 billion loan programme approved in 2010.

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http://www.globalpost.com/dispatch/news/afp/131007/world-bank-cuts-ukraine-growth-forecast-zero