It’s the Economy, Stupid

15 July 2018

Good news on the financial front, well, on the surface anyway. The World Bank predicts that Ukraine’s GDP growth in 2018 could hit the 3.5% mark. That’s a respectable number as we look around and make comparisons to the slow but steady GDP growth figures seen in neighbouring countries to the west.
But, the announcement comes with the inevitable caveats Ukraine watchers are used to. This figure will only be reached if we see more movement in pending anti-corruption reforms and press ahead with land market reform and privitisation of state-owned assets, including some state-owned banks. So, GDP growth could be impressive if – is basically the message.
As has been noted on these pages in the past, Ukraine’s GDP per capita is a paltry 2 200 USD. Whereas the respective figure for Poland is 12 400 USD. Starting from such a low base point, if Ukraine were to press ahead with the aforementioned reforms, and fix rule of law issues to attracts more foreign investment, then Ukraine could actually see much higher and far more impressive growth numbers.
In other economic news, inflation is falling. For the first time since September 2016 this key indicator of economic health dropped into single digits.

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