The growth of the minimal wage strikes at the prices: the world Bank downgraded the forecast for Ukraine

The world Bank (WB) raised its forecast for inflation in Ukraine in 2017 from 8.5% to 10%. This was reported by a leading economist of the world Bank office in Ukraine, Belarus and Moldova Anastasia Golovach.

According to her, conducted in Ukraine, the increase in the minimum wage have forced the world Bank to worsen the inflation forecast for 2017.

“We now expect inflation at 10%”, – said Golovach.

While the world Bank has kept the forecast of growth of economy of Ukraine in 2017 at 2%.

“The Outlook for economic growth remains moderate. There are several challenges that will face Ukraine. At the moment we are forecasting economic growth of 2% for 2017”, – said Golovach.

Key risks for the economy of Ukraine representative of the world Bank called vulnerable situation on foreign markets and trade blockade in the Donbass, which will have a negative impact on metallurgy and the production of electricity.

Also the world Bank noted that accelerating reforms can accelerate the growth of Ukraine’s economy to 4% in the next 2 years.

“We have good news: the acceleration of the pace of reform could accelerate the growth of Ukraine’s economy to 4% in the next 2 years”, – said the coordinator of the sector of poverty reduction and macroeconomic policies of the world Bank Farooq Khan.

According to the updated world Bank forecasts growth of Ukraine’s economy in 2018 will amount to 3.5%, in 2019 – 4%.

The budget deficit, according to WB estimates, will reach 3.1% of GDP in 2017, 2.6% of GDP in 2018 and 2.4% of GDP in 2019.

Public and publicly guaranteed debt, according to the forecasts of the world Bank, will comprise of 88.8% of GDP in 2017, while 83.5% of GDP in 2018 and 75.9% in 2019.