Ukrainian prime minister outlines problems for the economy

Lack of investment, high inflation and complication of economic cooperation with Russia are the main problems for the Ukrainian economy this year, Prime Minister Arseniy Yatsenyuk said here.

"Economic forecasts for this year are disappointing given double-digit inflation expectations and forecasts for a 3 percent drop in GDP," Yatsenyuk said at a meeting with businessmen who expect even worse results.

Difficulties 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 could suffer from the loss of the Russian sales market and an increase in natural gas prices.

Lack of political stability and security guarantees are also forcing foreign investors to leave the Ukrainian market, and the country's economy is very vulnerable to an outflow of funds, Yatsenyuk added.

Political, economic and military components led to a significant drop in the national currency, the hryvnia, Yatsenyuk said. In early April, the hryvnia fell to its lowest level against the US dollar since Ukraine gained independence in 1991.

To overcome the difficulties and ensure fresh injections of funds into the economy, the government plans to step up efforts to help businesses and ensure cooperation with international lending institutions, Yatsenyuk promised.