By Natalya Zinets
KIEV, Sept 18 (Reuters) - Ukraine's economy will return to growth in the first half of next year after the deepest contraction of the past 15 years in 2009, Economy Minister Bohdan Danylyshyn told Reuters in an interview on Friday.
The ex-Soviet state agreed a $16.4 billion bailout programme with the International Monetary Fund last year when the global crisis slashed demand for exports, driving down the hryvnia currency and battering the banking system.
Danylyshyn said he expected gross domestic product (GDP) to fall 10-12 percent this year after growth of 2.1 percent last year. The country's economy had been growing at an average rate of 7 percent since 2000 before the crisis hit home.
"Positive trends in the economy have already begun and by the end the year they will strengthen," Danylyshyn said.
"In 2010 we will step by step move forward with developing our economy. We expect that we will have a positive result already in the first half of next year.
"Due to the low base effect, it is possible for GDP to grow 3.7 percent next year. And in 2012 we will return to pre-crisis levels of GDP," he said.
The government has forecast economic growth for the full year next year at 3.7 percent. The World Bank thinks growth will be lower -- at 1.5 percent, while the International Monetary Fund (IMF) predicts 3 percent.
The IMF has disbursed over $10 billion of its rescue funds to Ukraine, whose economy is still industry driven and easily affected by foreign demand and price swings for its steel and chemicals. The steel industry comprises 40 percent of all that Ukraine exports, and exports themselves traditionally make up almost half of GDP.
Danylyshyn forecast industrial output would grow 2.9 percent in 2010 after an expected 17 percent fall this year. It grew 3.1 percent last year but fell 30 percent in the first quarter of this year.
Danylyshyn said he expected food production to grow 3 percent, metal production also by 3 percent and machine building by 5 percent next year. All three sectors have shrunk this year. He saw inflation this year at 12-13 percent and below 10 percent next year. Inflation had been a huge problem in Ukraine -- last year prices rose 22.3 percent after 16.6 percent growth in 2007.
"In previous years, the main reason for inflation was price rises for various food products, which form a large part of the consumer price index basket," Danylyshyn said.
"For 2010, we do not have such expectations -- the projected harvest and availability of those food products ... allows us to say that there will not be a price spike," he said. (Writing by Sabina Zawadzki; Editing by Ruth Pitchford)