Ukraine forecasts economy shrinking 6 percent this year

KIEV (Reuters) - Ukraine's economy may shrink by 6 percent this year due to the financial burden of fighting a months-long separatist conflict in its eastern regions, Finance Minister Oleksander Shlapak said on Monday. "Minus 6 percent will be a good result because the economic situation has deteriorated dramatically in connection with the war in east Ukraine," Shlapak told a government meeting. The forecast is in line with International Monetary Fund estimates, which expect the economy to contract by 6.5 percent this year, while the central bank predicts a fall of around 10 percent. Shlapak said GDP could rise 2 percent next year if a package of new tax laws is adopted by parliament. The tax amendments are likely to be submitted to parliament this week, he said. Prime Minister Arseny Yatseniuk told the government that the package would include changes in the income tax rate, social taxes and tax on company profits. "That is our clear requirement - there are reforms that must be done in the social, fiscal and public sector. We worked on this package for three months," Yatseniuk said. "No one expects a huge improvement as the situation is very complicated. Our changes represent a small but correct step forward," he said. (Reporting By Pavel Polityuk; Editing by Alessandra Prentice)