Ukrainian PM outlines challenges for economy

Shortage of investment, high inflation and complication of economic cooperation with Russia are the major challenges for Ukraine's economy this year, Prime Minister Arseny Yatsenyuk said here Friday.

"The economic forecasts for this year are disappointing given the double-digit inflation expectations and projected GDP fall of 3 percent," Xinhua quoted Yatsenyuk as saying at a meeting with businessmen.

The strains in economic relations with Russia, Ukraine's largest trading partner, will negatively affect the country's industrial production, Yatsenyuk said.

He said that Ukrainian enterprises may suffer economic damage due to the loss of Russian sales market and increased prices for natural gas.

Unstable political and security situations also forced foreign investors to withdraw from the Ukrainian market, Yatsenyuk said, adding that the country's economy is appearing very vulnerable to outflows of funds.

Political, economic and military elements led to a significant fall of local currency hryvnya, Yatsenyuk said.

In early April, hryvnya slumped to its lowest level against the US dollar since Ukraine's independence in 1991.

To overcome the challenges and ensure fresh injection of funds into the economy, the government will step up efforts to help businesses and ensure collaboration with international lending organisations, Yatsenyuk promised.