By Jonathan Davies

The Ukrainian economy is facing years of recession as a result of the ongoing conflict with Russia in the east of the country, according to the World Bank.

After the economy contracted by 6.8% last year, the World Bank is forecasting a 7.5% contraction in 2015. Last year the World Bank said it estimated the UKrainian economy would contract by 1% this year, while the International Monetary Fund (IMF) forecast 5.5%.

"Given the situation in the east, we expect gross domestic product (GDP) to continue contracting sharply especially during the first half of the year," the World Bank said.

Ukraine is set for growth in 2016, but only if trade relations between the countries are resolved. If they aren't, and Ukraine doesn't implement reforms in its energy and banking sectors, it could face "prolonged" recession.

The World Bank said: "Growth is expected to be led by a modest recovery of investment from a low base following large declines for three consecutive years.

"Further deterioration in trade relations with Russia could result in prolonged recession as reorientation of Ukrainian exports towards other markets will require more time and investments."