The World Bank has kept the forecast for Ukraine’s GDP growth in 2018 at 3.5%, Lead Economist and Program Leader covering Belarus, Moldova and Ukraine Faruk Khan said in Kyiv on Tuesday.
“Economic growth is projected at 3.5% in 2018 if pending reforms in anticorruption, land markets, state-owned banks, and privatization can be advanced in the next few months. This would provide an important signal to investors. If reforms are delayed, growth could drop below current levels in an uncertain macroeconomic environment as financing risks rapidly increase,” the World Bank said in a press release.
According to the World Bank’s economic update for Ukraine, the growth outlook has become more uncertain, but safeguarding macroeconomic stability and completing key pending reforms by July 2018 to bolster investor confidence can help boost growth in the next two years.
“The complex political environment ahead of the 2019 elections is affecting reform prospects, but a window of opportunity exists to complete key reforms by July 2018. Reforms in land markets, the financial sector, anticorruption, and privatization would not only address medium-term growth bottlenecks, but also provide an important immediate signal to strengthen investor confidence,” the World Bank said.
The World Bank’s experts said that addressing macroeconomic vulnerabilities and containing inflationary pressures to reduce cost of funds for the private sector is also important to strengthen investor confidence. Under such a scenario with continued improvements in investor confidence, economic growth could improve to 3.5% in 2018 and 4% in 2019, with fixed investment growing by about 15%.