Ukraine: Downgraded growth, downgraded ambitions

By Conal Campbell of www.Growth-Communications.com.

Ukraine’s government has approved its macroeconomic forecast for 2013, projecting GDP growth of 3.4% (vs. 0% expected this year) in line with the latest IMF forecast but exceeding Kiev based Dragon Capital’s projection of 2.5%. With Ukraine’s GDP growth expected to under-perform most regional peers on the back of a deteriorating investment climate The Economist’s “Where to be Born in 2013 – Lottery of Life” index ranking the country as the third worst country in the world across a broad spectrum of social and economic indicators (below grim locations such as Pakistan, Angola and Bangladesh) makes for bleak reading considering not even the country’s own government claims anything is going to change significantly in the medium term. The old Dmitry Medvedev argument about depressed resource prices forcing economies to modernise seems unlikely to apply to Ukraine anytime soon with the feeling among investors still being that the Ukrainian authorities’ Plan A is for the national economy to muddle through (unlike leaders’ own personal finances which continue to skyrocket) while any sort of Plan B involving attracting foreign investment is unlikely to materialise even in 2013.

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