[KIEV] Ukraine's worst recession since 2009 intensified last quarter, highlighting the nation's challenge after sealing an expanded US$17.5 billion bailout and agreeing on a truce in the war that's devastated its industrial base.
Gross domestic product fell a preliminary 15.2 per cent on an annual basis, the most in more than five years, the state statistics office said Monday. That's more than the 13.4 per cent median estimate of four economists in a Bloomberg survey and compares with a 5.3 per cent contraction in the previous three months. Seasonally adjusted GDP declined 3.8 per cent from the third quarter. The data exclude the Crimea peninsula that was annexed by Russia in March and areas where military operations were under way, the office said.
Ten months of fighting have left pro-Russian militants in control of a swathe of Ukraine's easternmost regions, which generated almost a quarter of industrial output at the start of last year. A cease-fire came into effect Sunday, days after Ukraine broadened a rescue from the International Monetary Fund, paving the way to approach bondholders over easier terms.
The fighting has destroyed roads and other infrastructure in the Donetsk and Luhansk regions that are home to the bulk of Ukraine's steel mills and coal mines. Industrial output sank an average 16.8 per cent in the last three months of 2014.
The economy, which the government forecasts will shrink 5.5 per cent this year, may only return to growth in 2016, according to Prime Minister Arseniy Yatsenyuk. The hryvnia, which has sunk 67 per cent in the past year, weakened 1.2 per cent to 26.4 against the dollar by the close in Kiev on Monday.