Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Cyprus Fallout Risks Tipping Ukraine Into Crisis, Capital Says

Fallout from Cyprus’s bailout may trigger a financial crisis in Ukraine and stem capital inflows into the former Soviet republic, Capital Economics Ltd. said.

Ukraine relies on Cyprus for about a third of its foreign direct investment because companies channel cash through the island for tax purposes, according to Liza Ermolenko, a London-based emerging-markets economist. Introducing capital controls risks disrupting those inflows, which may curb business activity, she said today in an e-mailed note.

“Ukraine is extremely exposed if the Cypriot bailout triggers a fresh spike in financial-market tensions,” Ermolenko said. “Wider vulnerabilities mean the Cypriot crisis may still be enough to tip Ukraine into a financial crisis of its own.”

Ukraine slipped into a recession in the fourth quarter as weakening demand for commodity exports such as steel caused a decline in industrial output. The current-account gap widened to a record 8.4 percent of gross domestic product in 2013, while FDI rose 8.7 percent to $7.8 billion.

Ukraine “is on the brink of a balance-of-payments crisis” and GDP will probably contract 0.5 percent this year, Ermolenko said. Its total external financing requirement over the next 12 months is about 40 percent of GDP, she wrote.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.