Erste Cuts Ukraine Economic Growth Forecast to 1% as Exports Ebb

Ukraine’s economic growth will probably slow to 1 percent this year as demand for the country’s exports dwindles, Erste Group Bank AG (EBS) said, lowering an earlier forecast of 3 percent.

“The slowdown in economic growth in Europe and Asia is now affecting the Ukrainian economy,” Maryan Zablotskyy, head of economic research at Erste Bank in the capital, Kiev, said today in an e-mailed note to clients. “Ukraine’s steel production and machine building are declining. These two industries made up more than a half of exports in 2010.”

Ukraine’s economy expanded “almost” 5 percent last year, the fastest pace since 2007, spurred by a good harvest and increased exports, Prime Minister Mykola Azarov said last week. That compares with 4.2 percent growth in 2010 and the government’s 3.9 percent forecast for 2012.

Ukraine’s grain harvest may fall 20 percent to 45 million metric tons next year, Zablotskyy said. Inflation may accelerate to 9 percent from 4.6 percent last year, he added.

To contact the reporter on this story: Daryna Krasnolutska in Kiev at

To contact the editor responsible for this story: Balazs Penz at

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