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Research

Ukraine Economy: Trying to time the turning point

Fresh data releases show the pace of Ukraine's economic decline has decelerated considerably over the past months (see top chart on the left). Against this backdrop, the mood among commentators and forecasters has become much less negative (perhaps even a touch positive) and they've now turned to trying to call the recovery's inflection point: 4Q15 or 1Q16. This represents a drastic change of sentiment versus the dreary 1H when the economy seemed to be falling into a bottomless pit. Barring a new external shock in the coming months, the dust should settle by end-2015 and a slow recovery looks inevitable. Meanwhile, the economy continues to muddle through, with high but slowing inflation and an expensive but relatively stable dollar and euro.

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