Ukraine’s economy is set to shrink in 2013, Goldman Sachs Group Inc. said, contradicting Prime Minister Mykola Azarov’s 3 percent-4 percent growth forecast.
Gross domestic product will probably contract 1.8 percent this year, Andrew Matheny, a Moscow-based analyst at Goldman, said today by e-mail. GDP, which fell 1.3 percent from a year earlier in the third quarter, dropped 1.8 percent in the fourth as industry and export weakness pushed Ukraine into its first recession since 2009, Goldman Sachs estimated in a Jan. 23 note.
“Ukraine has seen its macroeconomic fundamentals deteriorate in the past year as a result of a sharp negative terms-of-trade shock, rising external government redemptions, and a worsening fiscal position,” Goldman Sachs wrote. “The economy is now likely in a recession.”
Ukraine is seeking international aid as its economy suffers from weaker demand for exports such as steel. An International Monetary Fund mission is due to arrive next week for talks on a third bailout since 2008 after foreign reserves fell to the lowest level in almost three years.