he World Bank projects real GDP to fall by 7.5 percent in 2015, down from 6.8 percent in 2014, the World Bank press release states.
"This lower forecast is mainly driven by the ongoing conflict that has complicated efforts to stabilize the economy, disrupted economic activities, and hurt confidence of both investors and consumers. A gradual recovery starting in 2016 is possible if the conflict abates and the authorities continue implementing much-needed macroeconomic and structural reforms," press release says.
However, the World Bank believes that further escalation of the conflict in the east may deepen economic decline in 2015 and delay recovery over the next few years via several channels: damage of production facilities and infrastructure, lower exports, higher security-related spending, and indirectly through further deterioration of consumer and investor confidence.
As a reminder, the World Bank's current lending portfolio in Ukraine amounts to about US$4.6 billion through 15 operations. Since Ukraine joined the World Bank in 1992, the Bank's commitments to the country have totaled over US$9 billion for 45 projects and programs.
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