Ukraine’s economy will expand 3.5 percent this year, boosted by exports, the World Bank said today in a report on the former Soviet republic.

Gross domestic product will grow 4 percent next year and 5 percent the following year, the bank said at a press conference today in Kiev, Bloomberg reports.

World Bank economist Ruslan Piontkivskyi also said at the press conference that Ukraine urgently needs to contain the state budget deficit because the government has “overestimated” revenue, including what it brings in from value-added taxes. The budget gap will remain above 8 percent of GDP this year, he said

The bank also forecast the inflation rate at the end of this year to be 11.9 percent, while the rate next year will be 9.5 percent. It will fall to 8.1 percent in 2012.


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