Ukraine has been in the news consistently for over a year now due to major conflict between Russia. The economic downturn that has happened because of this conflict is severe. Ukraine is not in good shape while the fate of Russia’s economy is more of a controversy. President Obama described Russia’s as being “in tatters” based on falling oil prices and likely as a result of economic sanctions put on the country by other powers. Others are not so convinced and so our focus moves to the underdog in this situation, Ukraine. More recently the news is talking about the financial crisis in Ukraine and what that means for the rest of the world. Ukraine’s GDP is low and may deplete to as low as $70 billion. The graph above shows Ukraine’s GDP from 1987 to 2011 and in comparison to 2008 at $180 billion we can see that they are not in a good place.
Additionally, their currency, the hryvnia is losing value fast. In response the IMF has promised a total of $40 billion over a four year time period but has only pledged $17.4 hoping to gain the rest from outside sources. While this would be great to aid Ukraine’s economy many are concerned about where the IMF pledge will actually be coming from. Currently inflation is as high as 29% and in two years gas prices are predicted to be five times what they were in 2013. Based on these projections the citizens of the country are expected to be a third poorer than when the Soviet Union collapsed; a very dire time indeed. It will be important to keep an eye on Ukraine in the future and to see if the IMF is about to come up with money necessary over the next four years to help the flailing economy.