Economic demise set to continue, but farming is a hope

Significance

The hryvnia crisis, which has seen the currency's value plummet, has deepened. However, as reported by Reuters, the NBU decision was suddenly reversed following heavy criticism from Prime Minister Arseniy Yatsenyuk, who said the move was bad for the economy. Overall, Ukraine's economy continues to be weak and vulnerable to shocks. The local economy had already been struggling for most of 2012-13, owing largely to weak external demand and deteriorating trade relations with Russia. However, the political turmoil that the country found itself in soon after the February 2014 change of power exacerbated these troubles significantly.

Impacts

• Continued economic decline will prompt the government to take new unpopular belt-tightening measures in order to get international aid.
• Rapid economic reforms increase the risk of mass social discontent with far-reaching political implications.
• Should key merchandise exports fall further, producers could face an effective loss of their main markets.