News
17.02.2010
Ukraine’s Economy Shrank 15% in 2009, Ministry Says
Ukraine’s economic output plunged 15 percent last year, the most since 1994, because of the global financial crisis, the Economy Ministry said.
Gross domestic product shrank 7 percent on an annual basis in the fourth quarter after slumping 15.9 percent in the third, 17.8 percent in the second and 20.3 percent in the first three months, the state statistics committee in Kiev said yesterday.
The fourth-quarter “decline at a slower pace was because of a gradual recovery in industrial production,” Economy Minister Bohdan Danylyshyn said today in an e-mailed statement. The main barrier to economic recovery is a lack of credit, he said. The economy expanded 2.1 percent in 2008.
The global recession slashed demand for Ukrainian exports and dried up investment, forcing the country to turn for an International Monetary Fund emergency loan in November 2008 to stay afloat. Cooperation with the Washington-based lender has been stalled for a fourth month as the Cabinet failed to adopt the 2010 state budget and cut spending.
Ukraine’s economy has expanded since 2000, helped by industrial production, investments and strong domestic consumption. Production, which makes a quarter of GDP, slid 21.9 percent last year as the global recession cut demand for the country’s exports such as steel and chemicals. It is the biggest decline since 1994, the statistics data shows.
‘Marginally Worse’
“The data came in only marginally worse than we expected,” though the full-year figure may change due to revisions, said Olena Bilan, an analyst at Kiev-based investment bank Dragon Capital. “As the fiscal situation is expected to improve after the government regains access to external financing, we expect the economy to return to positive growth in the second half of 2010.”
Ukraine’s hryvnia declined versus the dollar and was trading today at 8.0300 as of 4:35 p.m. Kiev time, compared with 8.0215 yesterday, Bloomberg data showed. Government dollar- denominated bonds due in 2016 fell to 81.28 cents on the dollar, from yesterday’s 81.52 cents, pushing the yield to 10.516 percent.
GDP rose a seasonally adjusted 1.9 percent in the fourth quarter from the previous quarter, while remaining flat in the third quarter from the second, according to the statement.
The Economy Minister earlier forecasted the decline of GDP at 12 percent in 2009.
Bloomberg
