Kiev (AFP) - Ukraine is on track to return to economic growth this year but its pace hinges on how the eastern separatist conflict develops and resolving a political crisis, the World Bank said Friday.
The global lending institution's regional director Qimiao Fan forecast a one-percent expansion for the former Soviet country this year and a two-percent pick-up in 2017 after a 9.9-percent contraction in 2015.
"Obviously this forecast will depend crucially on two things: first, it will depend on how the conflict will evolve in the east. We assume that the conflict will not further escalate," Fan told reporters.
"Second, and I think much more importantly, it will depend on whether reforms will continue," he added.
"The current political crisis is posing a very serious threat to that very fragile recovery and is posing a serious threat to continued economic reforms. It is very important in our view that the political crisis is resolved as quickly as possible."
Ukraine has been wracked by uncertainty about its future since Prime Minister Arseniy Yatsenyuk survived a no-confidence motion in his pro-EU government on February 16.
The vote came after President Petro Poroshenko asked Yatsenyuk to step down over the public's seeming loss of trust in his ability to tackle graft and political dominance by a handful of shadowy tycoons that have plagued Ukraine for decades.
The apparent conflict between Ukraine's two top leaders and a decision by two junior members to walk out of the coalition has paralysed the government and drawn concern from Kiev's Western allies and the International Monetary Fund.
The IMF said it will wait for Ukraine to resolve it political problems and appoint a possible new prime minister before dispensing billions of dollars in vital aid that has been frozen since last year.
The nearly two-year pro-Russian revolt in Ukraine's industrial heartland has also affected industrial production and drained financial resources that are needed for investment on funding the war.
Kiev and its Western allies accuse Russia of orchestrating and supporting the conflict in reprisal for Ukraine's February 2014 ouster of a Moscow-backed president and decision to ally itself with Europe.
Russia denies the charges and accuses the United States of fanning months of street protests that eventually led to the former president Viktor Yanukovych's 2014 downfall.
The fighting has claimed the lives of nearly 9,200 people and driven more than 1.5 million from their homes.