EBRD regards Ukraine one of CIS countries most exposed to economic recession in eurozone
The European Bank for Reconstruction and Development regards Ukraine's economy one of the most exposed to economic recession in the European zone among the Commonwealth of Independent States economies, Alexander Pivovarsky, EBRD Economist for Eastern Europe and Caucasus, has announced in an interview with the Ukrainian service of Voice of America broadcasting corporation.
"Here, in the EBRD, we believe that Ukraine is one of the CIS economies most exposed to the Eurozone recession. And Ukraine is one of the most vulnerable economies outside the EU," Pivovarsky said.
In his words, Ukraine's economy hinges much on financial and economic crisis in the Eurozone, as long as bulk of its exports is meant for the European Union, about a third of its banking system is European banks, and a substantial portion of direct foreign investments coming to Ukraine from the EU.
Pivovarsky notes, now the economic situation in Ukraine is a little better than it was in 2008.
"Now the financial situation is better, because for three years considerable proportion of the bad credits has been written off and also several rounds of recapitalisation have taken place," the expert stressed.
But, in his words, Ukraine still has a substantial potential of instability because most of its exports are two kinds of products: steel and chemical industry products; high level of dollarization predominates its economy, which in Pivovarsky's opinion always has negative consequences during crisis; Ukraine in terms of export much depends on just several regions and its public-sector debt has risen by far as compared with 2007 and 2008.
Among the positive points he pointed to reformist steps of the Ukrainian government, having emphasized the pension and tax reforms.
He although stressed at once that for the investors was very important the situation with the investment climate, which in the EBRD expert's opinion was remaining difficult in Ukraine.
He pointed to importance of Ukraine's cooperation with the International Monetary Fund; in his opinion it will help stabilize money flows between Ukraine and the rest of the world, and stabilize expectations of internal and external investors.
The European Bank for Reconstruction and Development has worsened its forecast of Ukraine's real GDP growth to 2.5% from 3.5% for 2012.
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