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Economy Macroeconomic Framework (Percent change, unless otherwise indicated) 2016 2017 2018 2019 2020 2021 Actual si Proj. — Proj. Proj. Proj. Proj. Review SR Review SR Real GDP 23 2.9 2.0 32 3.2 3.5 4.0 4.0 Inflation (eop) 12.4 10.0 10.0 7.0 7.0 6.0 5.0 5.0 General government balance cs -2.2 -3.1 -3.0 -2.6 -2.5 -2.3 -2.1 -2.0 Public Debt ” 81.2 91.4 89.8 86.2 85.3 78.1 71.6 65.6 External current account -3.6 -3.0 -3.7 -2.6 -3.0 -2.4 -2.3 -2.9 GIR (eop, billions of U.S. dollars) 15:5 22.3 21.8 30.2 29.5 30.1 30.8 32.0 Months of next year's imports 3.4 47 4.6 5.9 5.8 5.4 5.2 5.0 Percent of IMF composite measures 61.9 83.9 82.0 105.3 102.4 101.3 101.8 102.4 Sources: Ukrainian authorities; and IMF staff estimates. 1/ Percent of GDP. Following a severe crisis in 2014-15, the economy is growing again-by 2.3 percent in 2016-and the flexible exchange rate and tight fiscal and monetary policies have greatly reduced internal and external imbalances. GDP, which declined from its peak of US$183 billion in 2013 to US$90 billion in 2015, is now recovering at a growth above 2% and is expected to grow at 3.2% in 2018. Growth is projected at 3.5%-4% in the medium term (IMF). The current account deficit fell sharply, from over 9% of GDP in 2013 to 3.6% of GDP in 2016 and reserves-while still low-have more than doubled to US$17.6 billion (end of 2017 target at US$21.3 billion). The overall fiscal deficit-including the energy sector’s quasi-fiscal losses, which had increased to 10 percent of GDP in 2014, declined to 2.3% of GDP in 2016, supported by strong spending control and the decision to raise energy tariffs to market levels. Inflation has fallen steadily from its peak of 61% in April 2015 to 12.4% by end- 2016, well within the target range of the NBU. It is projected to reach 9% in 2017 and 5% in the medium term. Ukraine has entered into a 4-year Extended Fund Facility (EFF) with IMF in March 2015 for US$17.5 billion. Following the third review by IMF the fourth tranche of US$1 billion was approved which would bring total disbursements under the arrangement to about US$8.38 billion. The EFF aims to put the economy on the path to recovery, restore external sustainability, strengthen public finances, maintain financial stability, and support economic growth by advancing structural and governance reforms, while protecting the most vulnerable. The Ukrainian administration showed commitment to reforms by nationalising the largest private bank, Privatbank, and liquidating over 100 banks within 3 years. HOUSE_OVERSIGHT_026135