Ukraine expects GDP to grow before 2014

First Deputy Prime Minister Serhiy Arbuzov has said Ukraine's GDP growth could speed up during the last six months of 2013. He based the prediction on the improvement in the dynamics of economic processes, the Information-analytical Bulletin of the Cabinet of Ministers of Ukraine informs.

Macroeconomic experts say demand has increased for steel products on foreign markets. They also expect price increases for agricultural products on international markets.

Experts blame adverse weather conditions in late August and throughout September for negatively affected agricultural businesses in the third quarter of 2013 and overall GDP volume over the period. The weather in October has been generally dry, facilitating increased grain harvesting and the sowing of winter crops. This will contribute to accelerated GDP growth in the fourth quarter in the agricultural and transportation sectors.

Experts say the economic development forecast will largely depend on success of the dialogue with International Monetary Fund (IMF). Experts hope that the signing of the EU Association Agreement (AA) scheduled for late November will boost mutual understanding between Ukraine and IMF.

Economic analysts say the government and the National Bank of Ukraine (NBU) will promote increased lending to the real economy sector. This should be related to a long-term lending for energy saving measures in municipal and public sector. They recommend appropriate budget policies aimed at promoting national production potential.

It is also necessary to ensure significant tax privileges for investors involved in large investment projects throughout the country. Economists are positive about implementation of shale gas extraction projects to fully start in 2014.

In estimating economic development of Ukraine in 2014, they believe there will be opportunities to expand markets and increase production of Ukrainian goods and services after the AA is signed.

The government expects to have new markets for Ukrainian products after signing the AA. According to Arbuzov, it is important to shift from resource-based economy to one that produces finished goods. He said this will enable a higher level of added value and is a fundamentally important point for the government.

Economists say new markets in South-East Asia, Africa, the Middle East and Latin America will be even more important than expanded EU trade.

Bringing operating procedures for production of goods in accordance with the European requirements will let the Ukrainian products gain more confidence and enable them compete on the developing markets, they say.