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WorldMay 1 2014

A glimmer of hope for Ukraine?

Between a floundering economy and volatile political situation, there is little room for optimism in Ukraine. But with new leaders hoping to tackle corruption and consolidate the fragmented banking sector, and with international funds earmarked to boost commercial lending, is the tide about to turn?
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Political upheavals and the widely criticised annexation of Crimea by Russia are taking their toll on the Ukrainian economy, with the country's banking sector facing a macroeconomic headwind that observers expect to remain throughout the rest of 2014.

Even before the loss of Crimea, Ukraine's gross domestic product (GDP) was expected to drop by 4% to 5% over the year. Now, practically every other macroeconomic indicator is also expected to decline. Stability is at a premium in the second quarter of 2014, as a senior advisor for the European Bank for Reconstruction and Development (EBRD), Anton Usov, notes. “The situation is so volatile that it is difficult to make even short-term forecasts. We do see this changing once the International Monetary Fund [IMF] package is signed, and Ukraine will need to follow some IMF guidelines,” he says.

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