Amid energy spats, Ukraine's economy showing resilience

Amid spats with Russia over natural gas, Ukraine's prime minister said Wednesday the economy for the former Soviet republic is on pace to grow at a decent clip.

"The economy is showing resilience," Ukrainian Prime Minister Volodymyr Groysman was quoted in state media as saying. "We are planning 3 percent growth for the next year."

While stronger that advanced industrialized economies, the prime minister said that growth rate should be closer to at least 5 percent. To advance, he said, the country needed to improve the business climate and take a "worthy place in Europe."

Ukraine serves as an energy bridge for Europe, hosting the pipelines that carry about 20 percent of the Russian natural gas headed west. Geopolitical risks to energy security escalated as Kiev moved closer to the European Union in recent years.

In an annual review, the International Monetary Fund said Ukraine needs to enact structural reforms in order attract investors to its oil and gas sector and reduce its import dependency. Private gas traders, meanwhile, need to be able to compete with state-controlled gas company Naftogaz.

European markets may draw on natural gas from Azerbaijan as a way to break the Russian grip on the regional energy sector though a network dubbed the Southern Corridor. Russia, meanwhile, could get around Ukraine by twinning its Nord Stream gas pipeline through the Baltic Sea to Germany.

Russian news agency Tass reported that Ukraine is pushing for an alternative to Nord Stream through alternative delivery points in the country. According to the report, that comes amid possible delays in the Nord Stream extension.

Russian Energy Minister Alexander Novak said Kiev's position on the project was irrelevant.

Despite the push for diversity in the European market, Russian natural gas company Gazprom, which controls both the supplies and the transit arteries, said markets in the European Union still needed Russian gas because of the lack of EU production.

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