Ukraine is being hard hit by the financial crisis and global economic slowdown that has depressed exports and dried up needed capital inflows. Ukraine's economic plight was addressed at a Washington forum on Thursday.
Ukraine specialist Anders Aslund of the Peterson Institute for International Economics says the crisis hit Ukraine suddenly in the final three months of last year. Once booming steel exports fell sharply and the currency exchange rate fell dramatically, throwing the economy into deep recession.
"Industrial production plummeted by 34 percent in January, that is primarily steel and mining, that have fallen by half," said Anders Aslund. "And the currency, the hryvnia, has been depreciated by about 50 percent in relation to the dollar."
Unemployment is rising sharply and the once fast-growing Ukrainian economy is expected to contract by seven percent this year.
Needing additional money to service its debt, Kyiv turned to the International Monetary Fund, of IMF, for help and secured a $16 billion loan that is conditional on budgetary reforms. A long stalemate that delayed implementation may have been resolved last week.
Ceyla Pazarbasioglu, the IMF official responsible for Ukraine, says a multi-party consensus on reforms is essential.
"There is a need to explain to the public exactly what is going on and not hide behind some numbers or some positive stories because the country is in a difficult situation," said Ceyla Pazarbasioglu. "And it can only get out if this is acknowledged and a strategy to get out is implemented."
The IMF official told the forum that the European Union and western donors should develop a regional strategy for dealing with crisis stricken economies in Eastern Europe. Anders Aslund called for immediate cash assistance for Ukraine from the European Union and the United States.