MOSCOW, January 20 (RIA Novosti) - International ratings agency Standard & Poor's said Friday that higher prices for natural gas imports from Russia could stunt the growth of Ukraine's GDP.
"This could affect [Ukraine's] economic growth," head of S&P's office in Russia Alexei Novikov told the Moscow radio station Ekho Moskvy.
Novikov said he said the situation would be clearer in the coming months, but that the agency had already noted a significant decline in Ukraine's economic growth, from 12.5% in 2004 to 3.5% in 2005. He said the decline reflects the political situation in the country, reprivatization and the investment climate.
Last week S&P affirmed its BB- long-term foreign rating on Ukraine. Novikov said the rating was highly speculative and reflected political and economic risks, adding that the country's financial situation was considered stable, since Ukraine does not have significant external debts.
"The problem that was caused by the gas crisis is estimated at $3 billion annually. Ukraine's GDP stands at $100 billion," Novikov said, cautioning that there were no grounds to speak of a crisis in Ukraine.
Some experts attribute the divergence in figures to the change of regimes in the country at the end of 2004 after a peaceful popular uprising catapulted western-leaning President Viktor Yushchenko to power. They say that the lower numbers could be a reflection of a more honest way of reporting statistics.
