Article by: Prof.Sunil Kumar Sharma
In the latest economic data released by the World Bank (WB), a marked improvement has been projected for Ukraine’s economic growth.
A WB report for June shows that, though the GDP growth rate for 2017 would remain at 2% as projected earlier, there has been a noticeable change for better for 2018 and 2019.
In its revised estimates, WB has changed the earlier stated GDP figures for Ukraine. For 2018 the growth rate would be 3.5% instead of 3.0% as predicted earlier.
According to the World Bank, for 2019, Ukraine would consolidate further its economic development and register a good 4% GDP growth, which is a full 1% higher than the 3% growth rate projected earlier.
Some of the factors that were considered by the World Bank while improving the economic projections for Ukraine in the coming years are as follows:
- Continuation of the vital institutional reforms in Ukraine that boosts the investment climate, develops trust of investors and positively impacts the overall business environment of the country;
- Stable political climate in the country and normal functioning of the central government;
- A more active role of the private sector in Ukraine and expected improvement in its contribution to the economy of Ukraine;
- A consistent increase in the government and household consumption over the last three quarters, which augurs well for the economy;
- Bumper Agricultural harvest, a boom for Ukrainian farmers which is instrumental in country’s economic revival.
At the same time the World Bank observed the following challenges, which, if not overcome and resolved, could derail the expected economic growth of the country:
- Culmination and completion of the necessary reforms underway, failing which Ukrainian economy would not achieve the expected growth;
- Increasing inflation;
- Prudent fiscal management including containment of fiscal deficit, which is vital for the healthy functioning of the economy;
- Rising escalation and continued Russian aggression in the Eastern region of Ukraine can be a spoiler and flatten the economic rebound.