Poverty in Ukraine down - World Bank

KIEV, July 3 (RIA Novosti) - Ukraine has substantially reduced its poverty rates, while the ongoing political crisis in the country has had a limited impact on the economy, two senior officials at the World Bank said Tuesday during a presentation of the bank's quarterly report.

Paul Bermingham, Director of World Bank in Ukraine, Belarus and Moldova, and Martin Raiser, Lead Economist at World Bank Country Office, Ukraine, said poverty in Ukraine had dropped from 32% and 14% in 2001 and 2004, respectively, to 8% in 2005.

The two officials cited a hike in real incomes in 2004 and 2005 and a substantial increase in labor productivity in private businesses as the major reasons for the improvement.

Despite the ongoing political crisis, Ukraine continues to take advantage of favorable external conditions, Bermingham said.

He said the fast growth of Ukraine's financial sector was both an advantage and a key risk for its future. The official recommended that the ex-Soviet republic take macroeconomic measures, regulate its financial markets and carry out structural reform.

The officials also said the risks in Ukraine's state procurements were still high, while its governance system and purchase audit showed poor performance. Bermingham said Ukraine spent over $4 billion, or some 5% of its GDP, on state procurements in 2005.