Ukraine Prime Minister: We Are Preparing To Halt Trade With Russia

Ukrainian Prime Minister Arseny Yatsenyuk (RIA Novosti / Alexandr Maksimenko)

Russia Trade Halt to Deepen Ukrainian Recession, PM Says -- Bloomberg

Ukraine, already facing recession, may see its economy shrinking by as much as 2 percentage points more should Russia halt trade as a conflict widens between the two ex-Soviet partners, Premier Arseniy Yatsenyuk said.

The trade relationship between Ukraine and Russia is “getting worse,” Yatsenyuk said in an interview on Bloomberg Television. “We do not have any kind of real relationship. we have the war. It will severely hamper Ukrainian gross domestic product.”

Ukraines’s economy has been battered by deadly anti-government street protests, Russia’s annexation of the Crimean peninsula and a pro-Russian insurgency in the nation’s eastern industrial heartland. Gross domestic product may shrink 6.5 percent this year, the government and the IMF predict now, compared with the 5 percent contraction they forecast in May.

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Update: Ukraine prepares for complete halt to trade with Russia -- RIA Novosti

My Comment: The civil war is devastating the economy .... and with IMF funds and all other monies being diverted to the war effort .... there is going to be no relief in sight for Ukraine's economy. But the big worry is .... what happens if the conflict continues for a long period of time? Ukraine is a very poor country .... it will not be able to sustain itself if all of it's resources are devoted to battling the other half of the country. Unemployment is already sky-rocketing. There is really no investment happening. And the best and the brightest are now leaving Ukraine .... not wanting to live in a society that is deeply divided and shows no sign of getting out of this crisis. My economic prediction still holds ... the implosion will continue, and I do expect expect an economic contraction more than the 6.5% that they are talking about. And with winter approaching and vital natural gas supplies now cut-off from Russia .... I expect this situation to approach a level that will seriously threaten the government of Ukrainian President Poroshenko.