Ukraine's GDP is expected to go down 5% this year, Prime Minister Arseniy Yatsenyuk announced at a parliamentary session.

Yatsenyuk added the growth forecast depended largely on the developments yet to be seen in Eastern Ukraine. But regardless of events there Kiev would not meet its 2014 budgetary target of a 3% increase this year.

Earlier estimates suggested the economy could shrink by 4.6%, but could also return to a 2.2-percent growth as early as 2015.

Ukraine's output was severely hampered by the standoff with Russia that followed the unrest throughout a number of towns and cities and the ousting of President Viktor Yanukovych.

The country has embarked on a number of reforms and austerity measures to avoid economic collapse, including a suspension of gas subsidies for households and also for district companies.

Kiev is also embroiled in a dispute with Moscow over gas prices and payments of debts to Russia's state-owned Gazprom.

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