Ukraine is pinning fewer hopes on metallurgy and coal industry

The World Bank said last week that the Ukrainian government will have to postpone hopes for economic growth until 2016, as it is projected to contract 8 percent this year and 1 percent next year due to disruption to production activities in the East. Alarmed by the crisis and poisoned relations between Kiev and Moscow, investors are dumping Ukrainian assets, pushing bond yields sky-high and the hryvnia to historic lows.

The main hopes of Ukraine's shattered economy lie in the rubble in the eastern regions, home to much of the crippled industrial power. Only when industrial production comes out of its dive and the currency stabilizes is it likely that there will be confidence in the economic recovery, which is contracting at the fastest pace since the start of the 2009 global financial crisis.

At the annual meeting of the International Monetary Fund and the World Bank in Washington, Ukraine wants to renegotiate the terms of its $ 17 billion deal with the IMF in April. Kiev said that the country is in a state of war and needs to build new armed forces. But some analysts say the new loan terms could have negative consequences for Ukraine's economy.

Economist Oleg Soskin, director of the Institute for Society Transformation in Kiev, said that the World Bank estimates Ukraine’s economy will shrink by eight percent is too optimistic. We expect Ukraine's GDP to fall by about 15 percent at the end of 2014, and the country should be wary of borrowing more money from the IMF.