World Bank may offer Ukraine USD 3 bln in aid in 2014

Макроэкономика 11.03.2014 The World Bank Group announced on March 10 it aims to provide up to USD 3 bln in loans to the Ukrainain government this year, as it has received a request for support from Ukraine’s government. “We are moving forward with our pipeline of projects and aim to support the government in undertaking the reforms badly needed to put the economy on a path to sustainability”, said World Bank Group President Jim Yong Kim in a press release. Alexander Paraschiy: The World Bank has joined the ranks of the potential supporters of the Ukrainian economy after the U.S. offered a USD 1 bln aid package, the EU promised at least EUR 11 bln in grants and loans and the IMF is considering to provide a sizeable loan already in April, as announced by Ukraine’s Finance Ministry on March 10. As soon as financial support from the West is secured, the Ukrainian government has to show its readiness for unpopular but badly needed reforms, including budget deficit cuts and utility tariff hikes. With sizeable support from the West, we believe the unavoidable, negative effect of shock therapy on Ukraine’s economy won’t last long and the economy has a solid chance to start recovering already in 2015.