Thursday, June 05, 2014

Donetsk region on the verge of economic disaster

The catastrophic effect the current troubles in Ukraine's easternmost oblasts are having on the local economy are described in an interview in 'Segodnya' with Donetsk State University professor, Yuriy Makogon.

He explains the economy of Donetsk region is primarily export-oriented with about 70% of production going to markets outside Ukraine.

If the Donetsk People's Republic formally declares independence, two-thirds of its export markets could be lost.

Even now manufacture of engineering products has fell back by 40% and unemployment in the region over the last 4 months  had doubled. Small and medium businesses have  been particularly badly hit.

Makogon believes the region will lose about 30% of its gross domestic product this year.

Even in the event of a most optimistic scenario of speedy resolution to the current conflict it will be 2016 before industrial production climbs back to 2008 levels.

The economic outlook it truly bleak.

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