Ukraine's government on Monday increased its predicted GDP growth rate for 2004 from 9.5 per cent to 10.5 per cent, according to an Interfax news agency report. The announcement came after meetings between Mykola Azarov, Ukraine's Vice Premier, and representatives from the International Monetary Fund in Kiev. The improved number is a result of greater-than-expected demand in the country's domestic construction and manufacturing industries, Azarov said. Overall low impact of high oil prices on the country's economy, plus increased demand in Near and Far Eastern export markets for Ukrainian products, make the 10.5 per cent prediction "if anything pessimistic," Azarov said. The Ukrainian government uses the GDP growth rate prediction as a base for planning tax and other state revenues over the course of the fiscal year. Greater total cash flows to the government will allow Ukraine to keep its government deficit within 3 per cent of outlays, Azarov said. A three per cent maximum national budget deficit figure is a key criterion for membership in the World Trade Organization, which Ukraine hopes to join in the near future. Ukraine economic production in real terms during the first six months of 2004 expanded at a blistering 12,7 annual rate, with 7 per cent price inflation. Ukraine's economy has grown at a 7 per cent or greater annual rate for the last four years.
