According to a British Economist Intelligence Unit forecast, by 2007 the economic situation in Ukraine will have brightened considerably, having expanded by 4% to 5% per annum in the interim. However, it was envisaged that the population would have contracted by at least one million.
The analysts said they believed macroeconomic stability had already become the norm in the country, noting that growth was likely to be spurred by increasing domestic demand and the country’s stringent tax mechanism. And though inflation was expected to rise after the record lows seen in 2002, it was expected to be kept in check by the stable currency exchange rate and strict monetary policy.
The forecast predicted that by 2007, the Ukraine's Gross Domestic Product would have grown by over 20% to 70 billion hryvnias. In the meantime, the hryvnia was expected to lose value but stay in the region of 5.8 hryvnia per $1 - assuming that nothing happens to the U.S. dollar itself. Taking inflation into account, growth in real wages in 2003/04 was seen as being slower than in the previous two years. However, GDP was expected to improve gradually from the current level of $850, reaching $1,800 by 2007.
