The World Bank significantly lowered the forecast of Ukraine's GDP

Recently, the World Bank revised its forecast for the economic development of Ukraine for 2015, taking into account the decline in production, to minus 12 percent of GDP. This is evidenced by the program documents prepared at the end of August in connection with the allocation of a loan of $ 500 million to Ukraine aimed at budget substitution.

In April this year, the World Bank predicted a drop in GDP by 7.5 percent, while in January - by 2.3 percent. At the same time, the documents predict the growth of Ukraine's GDP in 2016 by 1.0 percent. The documents indicate that a widespread decline is expected in the metallurgy and mining sectors affected by the conflict. In addition, retail trade will decline due to lower revenues associated with an increase in electricity tariffs, which increased again in September and will grow for another two years, so you involuntarily wonder whether it is more profitable to use a generator for electricity , especially in those places where a considerable amount is required to connect to power lines. ...

Analyzing the economic situation in the country, one can see that in the first quarter of 2015 there was a deepening recession, and in the second quarter it became more moderate, which is expressed in a fall of 17.2 percent and 14.7 percent in the first and second quarters, respectively. ... It follows from this that, on average, in the first half of the year, Ukraine's GDP fell by 16 percent.

World Bank experts note that the recession has affected all sectors, including agriculture. In the first half of the year, industrial production fell by 20.5 percent, which is associated with the ongoing conflict in the industrial eastern region of the country. Analysts predict that the annual decline will slow down in the second half of 2015, given the deeper decline in the same period in 2014.

World Bank officials expect a further decline in lending to the economy. Among the external economic problems, a reduction in trade with Russia, the largest export market in Ukraine, is mentioned.

The inflationary process may accelerate in 2015 and 2016 due to higher tariffs. Inflation is expected to rise to 50 percent on average in 2015. World Bank analysts believe that the economic recovery will come later than previously expected and will be weak, suggesting slight growth in 2016.