Ukraine’s GDP Shrinks Less Than Expected Amid Political Storm

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By Michael Klimes | December 12, 2013 12:07 AM EST

Ukraine's Prime Minister Mykola Azarov gestures during a meeting with foreign journalists in Kiev November 26, 2013 (Reuters)

Ukraine's GDP has shrunk less than expected over the third quarter, according to state analysts.

The decline in GDP for the third quarter was revised downwards from 1.5% to 1.3%, noted the State Committee of Statistics of Ukraine

The Ukraine is caught in the throes of political unrest as protestors have taken to the streets calling for the resignation of Prime Minister Mykola Azarov.

The country has been fielding numerous economic problems, hamstrung as it is between Russia and the European Union.

Azerove asked the EU for €20bn in aid to help address the dire state of its public finances.

He said the Ukraine required the money if it were to sign a trade pact with the EU, which the country decided to pull out of November.

The decision to exit talks with the EU triggered a groundswell of pro-EU feeling among many Ukrainians who believe their country's future lies with the EU and not Vladimir Putin's Russia.

Investors have said that without international aid Ukraine will find it hard to repay $7bn of hard currency debt, which is due in 2014.

The country is also seriously in hawk to Russia over energy costs.

However, some analysts see devaluation as a higher risk than a default, after Ukraine lost $2bn in foreign exchange reserves last month.

Its total reserves amount to around two months of import cover, much less than the three months' cover generally considered the minimum safe threshold.

Last night scores of riot police took on protestors in the capital, while special forces surrounded a makeshift protestors' camp in the city's Independence Square.

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