Yushchenko: Ukraine's economy worsening

May 25, 2009, 9:52 GMT

Kiev - Ukraine's President Viktor Yushchenko on Monday said his country's economic woes were worsening, with GDP contraction accelerating during the first three months of 2009.

Ukraine's economy shrank by some 14 per cent during the last quarter of 2008, but final tallies of recent performance are likely to show a fall of up to 23 per cent for the first quarter of 2009, Yushchenko said, speaking at economic forum in Kiev.

Key sectors including steel, agriculture, and chemicals manufacturing in the former Soviet republic were doing even worse, and are on track for production value reductions of as much as 29 per cent, Yushchenko said.

The impact of diminishing foreign markets and a massive outflow of foreign capital from Ukraine in the latter half of 2008 caught the Yushchenko administration unawares.

Yushchenko in a national television address in January promised Ukrainians GDP reduction over 2009 would be around 14 per cent.

The actual performance by Ukraine's economy from January through March 2009 was almost twice as bad, Yushchenko said on Monday.

Yushchenko earlier this month accused Prime Minister Yulia Tymoshenko of concealing unpleasant truth from the Ukrainian people, by restricting regular publication of state-compiled economic data, and releasing only quarterly results.

Data released so far by the Ukrainian State Statistics Committee, an agency answering to Tymoshenko, claimed Ukraine's economy on aggregate grew during 2008, and shrank 'only' 8 per cent during the last quarter of 2009 - roughly half the reality, Yushchenko said.

Tymoshenko on Friday claimed Ukraine's economy was showing signs of turning around, with production beginning to pick up and recession slowing.

Yushchenko and Tymoshenko, though technically partners running Ukraine's government together, are locked in a battle for leadership of the country's pro-reform movement. Both in recent months have blamed each other for Ukraine's poor economic state.

Ukraine's export-dependant economy is one of the world's hardest-hit by the international financial crisis, according to analysts in part because conflict between Tymoshenko and Yushchenko has stymied most government efforts to deal with the crisis.