IMF Director Christine Lagarde said sanctions against Russia clearly undermine the Ukrainian economy, given that the main market for Ukrainian goods was Russia. Therefore, I urge the parties to sit at the negotiating table as soon as possible said the IMF official.
Of course, the 17 billion dollar loan is not a gift. One of the harshest conditions that the IMF demands from the Ukrainian government is to raise the price of gas for Ukrainian households by 50%. This is catastrophic news for the population, as it has been able to heat their homes during cold winters because of the cheap Russian natural gas. As a consequence of the IMF conditions decline in household consumption will drop by 8 % in the year 2014, according the World Bank forecast.
London financial analysts on the other hand, doubt that the $ 17 billion will be enough.
Economists working for one of the largest independent macroeconomic research company, Capital Economics stressed that just the Ukrainian gas import debt to Russia exceeds 20 billion dollars.
Figures released Wednesday showed that the crisis was taking its toll on an already weak Ukrainian economy, with gross domestic product shrinking by 2.0 percent in the first quarter compared with the last three months of 2013.
(hidfo.net – hungarianambiance.com)