The World Bank has said that to achieve economic growth of up to 4% or more in the next two years Ukraine needs to maintain macroeconomic stability and complete reforms in the land market, the financial sector, anti-corruption and privatization.
"Boosting economic growth to 4 percent in the next two years will require measures to safeguard macroeconomic stability and completion of pending reforms in land markets, the financial sector, anticorruption, and privatization, to bolster investor confidence. If reforms are delayed, growth could drop below current levels in an uncertain environment," the World Bank said.
It believes that reforms would send an important signal to bolster investor confidence, help raise needed international financing, and safeguard macroeconomic stability.
According to World Bank estimates, economic growth is projected at 3.5% in 2018 if pending reforms in anticorruption, land markets, state-owned banks, and privatization can be advanced in the next few months. This would provide an important signal to investors. If reforms are delayed, growth could drop below current levels in an uncertain macroeconomic environment as financing risks rapidly increase.
The World Bank is also predicting that Ukraine faces major financing needs to repay public debt and fiscal pressures from higher public sector wages and social benefits in 2018 and 2019.
Mobilizing adequate international financing by completing pending reforms in the months ahead will be important to maintain macroeconomic stability, the World Bank said.
It also notes that meeting the fiscal deficit target of 2.5% of GDP in 2018 will require improving targeting of housing utility subsidies, making further wage increases contingent on measures to optimize the school and hospital network and public-sector staffing, and identifying affordable options to update public sector pensions.