World Economy

Ukraine Economy Battered

Ukraine Economy BatteredUkraine Economy Battered

Ukraine’s annual economic output could shrink by as much as 10% by year-end, the head of the Ukrainian central bank warned on Saturday, according to a report by the Wall Street Journal.

The severe economic outlook came as the Ukrainian military said fighting with pro-Russia rebels had erupted again in the country’s east, despite the continued shaky cease-fire.

Meanwhile, a Russian convoy carrying what Moscow said was humanitarian aid entered Ukrainian territory without Kiev’s permission and traveled to the rebel stronghold of Luhansk, where weeks of fighting have left residents without water and electricity.

Valeria Gontareva, head of the National Bank of Ukraine, said the embattled country’s annual gross domestic product is contracting this year. “I think it will be minus 9% or even minus 10%,” Ms. Gontareva was cited in news reports as saying. Ukraine’s economy grew an estimated 0.4% last year, according to US Central Intelligence Agency’s World Factbook.

Ms. Gontareva also was quoted as predicting a 35% drop in exports from Ukraine to Russia for the year. But she ruled out the possibility of debt default, the reports said.

The forecasts came as the central command center for Ukraine’s military campaign against pro-Russia rebels said fighting continued in the east, despite a cease-fire agreed early this month.