wiiw Forecast Reports
UKRAINE: Military spending offsets IMF-imposed austerity
publication_icon
in: On Thin Ice: CESEE Core Resilient in the Face of EU Stagnation and the Ukraine Crisis
wiiw Forecast Report No. Autumn 2014, November 2014 , pp. 121-125
| Hardcopy | € | 5 | add to cart |
UKRAINE
In Ukraine, the ongoing military conflict in Donbass, curtailed trade relations with Russia and weakening private consumption are pushing the economy ever deeper into recession. Although the collapse in domestic demand combined with currency depreciation has brought about a marked rebalancing towards net exports, the balance-of-payments pressure remains strong owing to the current capital flight. Under the prevailing circumstances, were the GDP to stagnate next year, it could well be seen as a major achievement. That, however, hinges crucially on the prospects for a lasting peace settlement in Donbass, as well as a revival of trade with Russia.
In Ukraine, the ongoing military conflict in Donbass, curtailed trade relations with Russia and weakening private consumption are pushing the economy ever deeper into recession. Although the collapse in domestic demand combined with currency depreciation has brought about a marked rebalancing towards net exports, the balance-of-payments pressure remains strong owing to the current capital flight. Under the prevailing circumstances, were the GDP to stagnate next year, it could well be seen as a major achievement. That, however, hinges crucially on the prospects for a lasting peace settlement in Donbass, as well as a revival of trade with Russia.
Reference to wiiw databases: wiiw Annual Database, wiiw Monthly Database
Countries covered: Ukraine