World Bank Vice President for Europe and Central Asia Shigeo Katsu believes that Ukraine’s economic growth in 2005 may jump by 5-6%, and that the dynamics of this growth will largely depend on the pace of reforms and an attractive investment climate. Mr. Katsu said that during his visit to Kyiv on September 4-7 he had a number of brief but productive meetings with Ukraine’s leadership. The Ukrainian government has an ambitious program, but it is also facing “a great many complex tasks that must be resolved” in the economic and social spheres, he added.
Mr. Katsu noted that there are certain external factors influencing Ukrainian economic growth, specifically reduced prices for Ukrainian export goods, rising fuel prices throughout the world, and the pressure of the inflation processes. Mr. Katsu declared that “the most important task of the government is consistency in its declarations” and a predictable policy, since this is a precondition of investors’ stable interest in Ukraine. The vice president of the World Bank pointed out that investors’ current lack of confidence is caused by the protracted reprivatization process. Stressing the importance of upholding the rule of law in this country, Mr. Katsu said that the Ukrainian government must step up reforms. He also noted that the World Bank links the question of loans to Ukraine with the pace and quality of reforms.
He also announced that the World Bank agrees with the International Monetary Fund’s stand concerning flexibility of the exchange rate and that it supports the Ukrainian government’s WTO membership plans. He further noted the slow rate of implementation of investment projects undertaken by Ukraine and the WB. As earlier reported, Ukraine’s real GDP growth was 2.4% in July 2005 compared to the same period in 2004, and that it totaled 3.7% in January-July.
