Ukraine’s National Bank assesses GDP losses due to Donbass blockade

The National Bank has assessed losses of the Ukrainian economy because of breach in the trade relations with uncontrolled territories of the Donetsk and Lugansk People’s Republics as $1.8 bn this year and $0.5 bn next year.

As deputy head of the National Bank of Ukraine Oleg Churiy, due to the Donbass blockade, they expected significant slowdown in the GDP growth, however, the losses were partially compensated by favorable conditions for trade and a record-high grain harvest in 2016-17. According to current macro-economic forecasts of the regulator, the Ukrainian economy will show a 2.2% growth this year.

The assessment given by the leadership of the Ukrainian National Bank is another attempt of the Ukrainian authorities to calculate the losses of the Donbass blockade that started this February.

Initially, Prime Minister Volodymyr Groysman announced that the country lost 1% of GDP growth due to the blockade. Later, the minister for uncontrolled territories Yuri Grymchak cited a bigger figure: according to him, the losses were about 1.5% of the GDP. Deriving from the fact that last year’s nominal GDP was $93.93 bn, the data presented by the National Bank means that the losses were even bigger – about 1.9% of the GDP.