World Bank downgrades Ukraine's economic outlook for 2015

The World Bank on Tuesday downgraded its expectations for Ukraine's gross domestic product (GDP) performance this year, saying the Ukrainian economy remains in uncertain conditions.

In its newly released Global Economic Prospects report, the bank projected that Ukraine's GDP would contract 2.3 percent in 2015, worse than its October forecast of a 1 percent decline.

The bank attributed the downward revision mainly to the uncertainty over the conflict in the country's eastern regions, which has harmed its industrial production and disrupted economic activities.

"Ukraine's economy is facing high levels of uncertainty. In the baseline scenario, which assumes no further escalation, we expect a slowdown in 2015 and the recovery in the 2016 and 2017 years," the report said.

The situation in eastern Ukraine is making revenue collection difficult, adding pressure to the country's balance of payments, it added.

Besides, the report said, Kiev is expected to experience a rough year in 2015 due to its heavy external debt and high budget deficit.

The bank also said the weak economic performance in 2015 would be followed by positive growth of 3.5 percent next year and 3.8 percent in 2017.

According to a budget bill approved by the Ukrainian parliament on Dec. 29, the country's GDP would contract by 4.3 percent to 109 billion dollars in 2015. Endi