The Ukraine Economy Has Imploded

War Severs Ukraine’s Industrial Arteries as Economy Sinks -- Bloomberg

The bloody conflict in Ukraine’s east is severing the arteries that connect the nation’s economy.

The effects are being felt hundreds of miles from the unrest in industries as different as electricity and food processing. Power plants at the other end of the country are being starved of coal because of disruptions to mining, while in Kiev, one of Ukraine’s biggest poultry producers is looking abroad for incubatory eggs after output was halted at its facility near the war-ravaged city of Donetsk.

Months of fighting have left pro-Russian rebels in control of a swathe of Ukraine’s easternmost regions, which generated almost a quarter of industrial output at the start of the year. The knock-on effects of idle factories are seeping through an economy at risk of a 10 percent contraction in 2014, according to Ukraine’s central bank. The International Monetary Fund says $17 billion may not be enough to avert a default.

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Update: World Bank: Ukraine GDP to shrink 8% this year.

My Comment: The stories that I am hearing from family, friends, and contacts back in Ukraine gives me the shivers. Much of the population is now underemployed, and with everyone now predicting a harsh winter .... this is only going to further raise tensions and unrest. What makes me angry is that the reforms that were promised have not materialized .... and in many cases the corruption has gotten worse. If there is no change my prediction still holds .... a compete economic and financial collapse by January /February 2015.