The Ukraine economy shrunk 17.6 percent in the first quarter of 2015 compared to the same period last year, sapped by continuing violence in its eastern industrial heartland, the national statistics agency said Friday.
The fall in Q1 GDP was 6.5 percent compared to the final quarter of 2014, Ukraine’s state statistics service said.
The plunge followed recent forecasts by international organisations predicting Ukraine’s economy would decline even faster than expected as the continuing conflict with separatists in the east undermined industrial production.
On Thursday the European Bank for Reconstruction and Development said Ukraine’s “GDP is now expected to shrink by 7.5 percent this year — a worsening outlook since January, when a five percent contraction was forecast.”
In late April, the World Bank revised its 2015 outlook for Ukraine down from an initial 2.3 percent to 7.5 percent, saying “the conflict in the east has become the main driving force behind the fall”.
Halting it, the World Bank said, could only occur “if the situation in the east is stabilised and the banking system recovers”.
The International Monetary Fund has agreed to a bailout deal worth $17.5 billion (15.9 billion euros) over four years. It estimates the country must raise $40 billion overall to avoid financial collapse.