The head of the National Bank of Ukraine (NBU) on Thursday said the country's currently blistering 12 per cent annual GDP expansion rate was too slow and called for monetary steps to boost expansion, according to an Interfax news agency report. Political upheavals during Ukraine's Orange Revolution late last year, combined with a global economic slow-down, have reduced the present average annual GDP expansion rate from 13.6 per cent last September to an averaged 12 per cent in December, said Valery Litvisky, NBU chairman. "We are seeing a cooling of the (Ukrainian) economy," Litvisky said. "A risk of an overheating (of the economy) still exists ... but at the same time we must consider the risk of over-cooling as well." The new government nevertheless needs to apply monetary levers to keep economic growth moving faster than inflation, or risk an expansion rate during 2005 of "only five to six per cent," Litvisky said. Measures needing consideration include further strengthening of the hryvna, a reduction of the money supply, and at the same time an expansion of domestic credit, he said. Increased cooperation between the International Monetary Fund (IMF), the World Bank, and other international credit organizations is necessary, Litvisky said, to reduce the cost of capital.
