Updated 05:00 a.m. Moscow Time
MOSCOW, September 18 (RIA Novosti) - The European Bank for Reconstruction and Development (EBRD) has revised the Ukrainian economy growth forecast for 2014, expecting its GDP to fall by 9% instead of the earlier predicted 7% decline, reads the bank's press release published Thursday on its official website.
"There are significant downside risks to the outlook stemming from protracted and intensified fighting and from further breakdown of trade linkages with Russia," the press release reads.
The EBRD believes that in 2015 the situation can improve because of the support provided to Ukraine by the IMF. However, in 2015 the Ukrainian GDP is expected to decrease by 3%, the EBRD's press release states.
"On the upside, eventual stabilization in the East may pave the way for infrastructure rehabilitation and for confidence recovery, although the timeline is highly uncertain," the press release reads.
The bank's decision is a result of the crisis in Ukraine, with a standoff between government forces and independence supporters in the country's southeastern regions, as well as problems with external financing. The Ministry of Finance of Ukraine was previously expecting the GDP to decrease by at least 6%.
Ukraine is on the verge of default. On August 29, the International Monetary Fund approved the disbursement of about $1.39 billion to Ukraine. The organization approved its two-year $17 billion stand-by arrangement on April 30.