OREANDA-NEWS. The World Bank (WB)  just released macroeconomic review improved Ukraine's GDP growth forecast for 2007 from 6% (at first, it was 5.5%) to 6.7%. The WB also forecasts 5.5% GDP growth for 2008, 5% for 2009, and 5% for 2010. At the same time, the WB raised this year's inflation forecast from 9.7% to 12.5%. The WB also forecasts 9.6% inflation for 2008, 8.3% for 2009, and 7.4% for 2010. The WB also expects that the growth of the Ukrainian banking system may slow down next year, but will still be higher than in other European states. Another important point that the WB forecasts is that conditions on the markets for Ukrainian exports will start deteriorating in 2008.

According to Millennium Capital's analysts, the forecast of WB is, as usual, overly pessimistic. They also expect the continuation of high growth in the banking sector (about 50% in assets) as it is very far from a mature level, especially in retail loans and mortgages. The deterioration of foreign trade is (always) probable, yet, in the opinion of the expets, it is not likely for the next year for Ukraine as long as the world economy continues to show a high demand for steel, as we will likely be the case in 2008. "Overall, we maintain our forecast for real GDP growth in 2007 at 6.9% and 2008 at 6.7%," the analysts state.