Interfax: Kremlin aide: Ukrainian economy faces collapse, GDP could plummet 50 percent

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(Interfax – October 9, 2014) The Ukrainian economy is in a catastrophic state and the country could need hundreds of billions of dollars to stabilize it, Russian presidential aide Sergei Glazyev said at a Eurasian Economic Integration conference in Moscow.

“Ukraine has entered into a phase of economic catastrophe. Calculations by the Eurasian Development Bank show that Ukraine would have needed $55 billion to stabilize the situation half a year ago. International institutions offered Kyiv one-and-a-half times less and have given them practically nothing since,” Glazyev said.

“Ukraine, by our reckoning, has slipped from a trajectory where stabilization could still have been achieved into a trajectory of steep decline, which we estimate to be minus 15 percent of GDP. It will take $100 billion-$120 billion to achieve any sort of stabilization,” he said.

But the collapse could be even more dramatic, he said. “If Ukraine cannot keep its footing here, then we forecast GDP decline of up to 50 percent, a total end to the investment process and the effective collapse of the Ukraine economy, a solution to which would require joint international programs costing $300 billion,” he said.

Glazyev said Ukraine should not expect the International Monetary Fund (IMF) to cover this.

“Our consultations with the IMF indicate that the most the IMF will give is to refinance its own loans,” he said.