Usachov V.A. ,Skorovarova M.K.

Donetsk National University of economics and trade named after Mikhailo Tugan-Baranovsky Economy of Ukraine 2012-2013

Ukraine is one of the world’s most productive farming regions and is known as ”Europe’s granary”. The dynamics of Ukraine's economy has slowed down due to the debt crisis in the European zone, Senior Economist of the World Bank representative office in Ukraine Ruslan Piontkovski says, ForUm correspondent reports

According to the experts, the 2% growth in the first quarter has been reached at the expense of domestic demand. Proper monetary policy of the National Bank and the foodstuff price decline have led to the deflation of consumer's price in June (1.2% down). At the same time, the weakened demand suppresses the growth of industrial production in the second quarter. The economist also pointed out that the account deficit of current operations in the domestic economy has stabilized amid the low amount of gas purchases and poor readiness of investors to take risks, while the import decline has resulted in the stabilization of import dynamics.

"We expect the GDP growth rate to remain at the level of 2% by the year end. As for the coming year, we expect the economic growth to speed up to 3.5% rate in connection with the gradual overcoming of the crisis in Europe and the growth of the overall GDP in the EU by 0.7%. Further improvement of the foreign economic situation in 2014 will enable the Ukrainian economy to grow further - by 4%," Piontkovski said.

The expert has confirmed the economic growth requires structural reforms, including those provided by the President's program.

Ukraine’s economic growth will slow this year because demand for the former Soviet nation’s exports is “waning,” the International Monetary Fund said.

Gross domestic product will probably advance 3 percent in 2012, less than the government’s 3.7 percent forecast and last year’s 5.2 percent growth, the Washington-based lender predicted today in its World Economic Outlook report. Inflation may average 4.5 percent, compared with 8 percent last year, it said.

Ukraine’s economy is losing momentum as the euro area’s debt crisis trims demand for exports such as metals, which generate more than 50 percent of GDP. The economy grew 4.7 percent from a year earlier in the fourth quarter, compared with 6.5 percent in the previous three months, official data show.

Should Europe’s debt crisis escalate, Ukraine’s currency will come under pressure while the government may struggle to raise funding as capital outflows create large external financing needs, the IMF said. The current-account deficit will widen to 5.9 percent of GDP in 2012 from 5.6 percent last year before narrowing to 5.2 percent in 2013, it added.

The IMF sees GDP growing 3.5 percent in 2013.

Ukraine established a pollution fee system that taxes air and water emissions, as well as solid waste disposal, but the derived revenues still are not fully redirected to environmental activities. Under the National Action Plan on Environment Protection for 2011-2015 approved in May 2011, the government pledges to complete the removal and disposal of pesticides and toxic chemicals from air and water by the end of 2012, create automated air pollution monitoring systems in main industrial regions, improve urban water supply and wastewater treatment, and decrease carbon dioxide emissions in the municipal heating sector by 10% by 2015.

Ukraine is a party to numerous international conventions and treaties including the Kyoto Protocol and is interested in regional environmental cooperation. Although its commitment to environmental protection and sustainable development lags behind commitments made by its East European neighbors, Ukrainian policy for EU integration is a positive driver for the development of a national environmental policy commensurate with EU environmental standards.