No Bottom in Sight as Ukraine's Economy Continues Free Fall
More bad news for Ukraine’s economy, and it’s only expected to get worse. Reports show:
- rampant inflation at 60.90 percent
- the state is basically bankrupt
- economy shrunk by a fifth since the start of war
- economy contracted 17.6 percent in the first quarter of 2015
- cost of goods has soared
- third world wages
- public debt jumped to 73 percent of GDP from 41 percent last year
- drop in exports
Ukraine is currently renegotiating debt with creditors, and just last week received a $2.0 billion lifeline from the EU.
But it has suspended foreign debt payments and is moving closer to default.
Loss of major coal mines and steel producers in Eastern Ukraine, undeveloped agriculture in the western part of the country, lack of reforms due to political rivalries, and structural problems means that Ukrainians will continue to suffer for some time to come.
It's all Russia's fault, of course.
There seems to be no bottom for Ukraine's economy.
The extent of the damage caused by the conflict in the country's east was highlighted in a report showing the economy had shrunk by almost a fifth since the violence began last year.
Other indicators likewise show a country on the edge, with inflation rampant and the state out of money.
With much of the country's industry in the hands of pro-Russian rebels in the east, stabilizing the economy has become a big, if immensely difficult, task for President Petro Poroshenko's government.
Here's a look at the economic decline affecting this country of 45 million people.
"In 2014, Ukraine lost approximately 20 per cent of its economy with industrial sector output in Donetsk and Luhansk regions falling by 30 to 40 per cent," Ukraine's U.S.-born Finance Minister Natalie Jaresko told The Associated Press.
It was the tenth quarter of economic contraction in the last 11. The country had already spent large periods in recession during the two years before the separatist conflict broke out.
Click here for our commenting guidelines