WARSAW: Ukraine faces a plunge into recession this year and Russia could follow, the EBRD bank warned yesterday as it joined other major institutions in highlighting the crisis’ deep economic fallout.
The country has been riven in recent months as Russia has taken over the Crimea and demanded the country immediately pay off huge gas debts, while pro-Moscow insurgents in other regions have clashed with government troops as they push for greater autonomy from Kiev.
“The crisis in Russia and Ukraine is having a severe impact on the economies of the two countries,” the European Bank for Reconstruction and Development said in a report released at its annual conference in Warsaw.
Sharply downgrading its forecasts made in January, the EBRD said it now expected Ukraine to tumble into recession in 2014 with a contraction of 7 percent — and to deliver zero growth next year.
The IMF, which last month approved a $17bn aid package for Ukraine, has forecast a 5-percent contraction to the nation’s economy this year. AFP