Blockade of rebel-held east forecast to hurt Ukraine economy

Ukraine's central bank says a trade blockade of rebel-held regions in the east is hurting the economy.

The National Bank of Ukraine says it has slashed its estimate for economic growth in 2017 to 1.9 percent from the 2.8 percent predicted in January due to the blockade.

The bank says the blockade would have driven growth even lower, but its effects were partially offset by better market conditions for some exports.

President Petro Poroshenko declared the transport blockade of rebel-held areas last week.

An informal blockade by some nationalist groups had earlier led to pro-Russian separatists seizing control of dozens of major businesses in the east.

The blockade has exacerbated tensions in Ukraine, where fighting between government forces and separatist rebels has killed more than 9,800 people since April 2014.