NBU forecast for 2016: Economic growth to continue restoring, but will be moderate

NBU forecast for 2016: Economic growth to continue restoring, but will be moderateThe National Bank of Ukraine (NBU) leaves Ukraine's GDP growth forecast at around 1% for 2016, the NBUreported on its website.

"The NBU anticipates that economic growth will continue restoring in 2016, but it will be rather moderate – around 1%," the central bank said.

Improved expectations and establishing economic links between the regions amid macro-financial stabilization and de-escalation of the military conflict in eastern Ukraine would prompt growth, as well as low comparison base.

The moderate growth pace is linked to the complicated external situation (slow growth of the global economy, low prices on international commodity markets, new trade and transit restrictions in Russia) and the worsening of internal political instability.

GDP decline slowed quicker in Q4 2015 than it was projected by the NBU. According to the revised data from the State Statistics Service, real GDP increased by 1.4% in Q4 2015 quarter-over-quarter (excluding the seasonal factor), and in annual terms the GDP fall slowed to 1.4% (the NBU tentatively reported 1.2%).

Read also: Experts improve forecast for Ukraine's GDP growth in 2016 to 1%

This is related to large growth in the construction sector and the improvement of the situation in the sphere of services.

The decline of real GDP in 2015 by 9.9% was also smaller than the central bank projected (10.5%). The general trends in the economy in 2015 coincided with the NBU's expectations.

The NBU said that investment started growing in H2 2015, but it happened later than it was predicted.
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