Fitch gave a worse Outlook for the economy of Ukraine

International rating Agency Fitch has lowered its growth forecast for Ukrainian GDP in 2017, from 2.5 percent to 2 percent. This is stated on the Agency’s website.

“Growth of Ukraine’s GDP in 2016, up 2.3 percent, which exceeded expectations, but the embargo will negatively affect mining, metallurgy and electric power industries. We forecast that growth in 2017 will slow to 2 percent,” – stated in the message.

It is noted that in 2018, the GDP growth could reach 3 percent due to improved consumer demand and investment.

The Agency forecast the average inflation in 2017 to 11.2% compared to 14.9% in 2016.

In addition, Fitch affirmed long-term Issuer default rating of Ukraine in foreign currency at the national level (ratings of b indicate the presence of certain credit risks with a limited margin of safety – ed.).

“The ratings of Ukraine there is a lack of liquidity, high debt burden and structural deficiencies associated with a weak banking sector, institutional constraints, geopolitical and political risks”, – is spoken in the message.

At the same time, the international reserves of the NBU increased to 16.7 billion dollars after listing the tranches from the International monetary Fund (IMF) – $ 1 billion, and the European Commission (macro-financial assistance from the EU 600 million euros).

According to forecasts Fitch, by the end of 2017, international reserves could increase to 18.1 billion dollars.

The Agency noted that the IMF program has a positive effect on the credit profile of Ukraine, by supporting external financing, trust, and ensuring that the reform momentum.

“However, further payments from the IMF and other international partners will depend on progress in the implementation of the programme of structural reforms… the Key indicators of the reforms include pension reform, the introduction of a land market, privatization, and progress in fight against corruption,” added Fitch.