Ukraine's trade balance will not change or worsen after signing an Association Agreement and creating a Deep and Comprehensive Free Trade Area with the European Union.

This conclusion has been made in a survey conducted by the Institute of Economics and Forecasting of the National Academy of Sciences on the projected effects in 2014 for the Ukrainian economy from association with the EU, presented in Kyiv on Thursday.

"Ukraine's trade balance with the EU will remain almost unchanged, or will worsen due to the outstripping growth of imports, which will put additional pressure on foreign exchange reserves," the survey found.

After the signature of the agreement and removal of customs duties for Ukrainian goods the exports will rise slightly, and in 2014 will reach UAH 12 billion (USD 1.5 billion). Two-thirds of them belong to the real sector, and a third to the export of services. Imports of goods and services will increase by UAH 8.2 billion (USD 1 billion).

"Given the stagnation of European markets and consequently the problem with increased presence of Ukraine on them, the positive effect for businesses will be implemented largely not due to an increase in exports, but due to the opportunity of investing in modernization, entering new markets in third countries, etc.," the Institute analysts said.

For Ukraine's GDP the positive effect due to the FTA with the EU will make in 2014 up to 0.5%, the economists predict. However, the introduction by Russia of tariff and non-tariff protective measures completely negates the positive effect of association and the FTA with the EU, leading to a drop in GDP by 0.5-1%. The further prospect of Ukraine's exclusion from the FTA with CIS degrades this figure manyfold, the researchers noted.

Ukrinform