BUSINESS
09/02/2014 10:33 EDT | Updated 11/02/2014 05:59 EST

IMF: Ukraine Could Need Billions In Additional Aid If Fighting Persists

ASSOCIATED PRESS
A pro-Russian rebel watches as Ukrainian troops evacuated from the rebel-held town of Starobesheve, eastern Ukraine, Saturday, Aug. 30, 2014. Ukrainian government forces have succumbed to a sequence of military failures and seen their holdings in the conflict-ridden east shrink in recent days as Russian-backed rebels continue their fast-paced offensive. (AP Photo/Sergei Grits)
BRUSSELS - The International Monetary Fund says Ukraine will need billions of dollars in additional support if the fighting between the military and Russian-backed separatists in the country's east persists.

In its first in-depth assessment since granting the country a $17 billion bailout program in March, the IMF said Tuesday "risks loom large" for the country's economy.

It says the bailout program already faces a $3.5-billion funding shortfall through 2015, with the economy forecast to shrink by 6.5 per cent this year. Analysts say Ukraine's gross domestic product might tumble even more.

It says if the fighting in the eastern region — representing about 16 per cent of Ukraine's GDP — were to persist through next year, Kyiv would likely need additional support worth $19 billion only to shore up its central bank reserves.

Pro-Russian rebels in Ukraine