Page 5 - UKRRptFeb21

1.0 ​Executive summary
For an outlook of what bne IntelliNews expects this year read our 2021
Outlook
Ukraine was hit hard by the coronacrisis, but the economy weathered the story surprising well at the end of the day.
The World Bank also estimates the fall of the Ukrainian economy in 2020 at 5.5%. ​The official forecast for the 2020 contraction in Ukraine's GDP in 2020 is for 4.8% at the end of the year and 4.6% of positive growth in 2021, according to the Ministry for Development of Economy, Trade and Agriculture of Ukraine
The National Bank of Ukraine (NBU) had previously separately forecast the economy to decline by 6%, but towards the end of the year it improved its estimates, to about 5%, predicting a recovery in 2021 by 4.2%.
The outlook for 2021 is for a bounce back that will get underway in the first quarter of the year, depending on the dynamics of the coronavirus pandemic. Infection rates were falling in the last months of 2020, but Ukraine has been unable to secure supplies of any vaccine and will be one of the last countries in Europe to roll out its mass immunisation programmes, after it refused Russia’s offer of the Sputnik V vaccine.
The World Bank revised upward its forecast for Ukraine's growth in 2021 to 3.1% from its earlier forecast of 1.5% issued in October, according to the January 2021 World Bank's Global Economic Prospects, Interfax reported on January 6.
The y/y dynamics of Ukraine's main industries improved across the board in December.​ Industrial output climbed 4.8% y/y in December after a 0.3% drop in November, driven by improvement in both the mining and quarrying and the manufacturing sectors. Industrial output was still down 5.2% in 2020.
Construction output growth accelerated to 9.9% y/y in December from 9.3% in November (for 4.0% growth in 2020), retail trade growth climbed to 13.4% from 12.1% (8.4% in 2020) and growth in the agricultural sector surged to 26% from 11.3% (however, output dropped 11.5% in 2020 due to a drought in the middle of the year).
The strong recovery in 4Q20 has helped to offset the contraction in 9m20. While the economy still shrank last year, the decline in GDP will likely be close to 4.5%, which is better than we had expected previously. This year, we expect GDP to recover by 4%.
Real wages rose by 10% last year, compared to 2019, ​reports the State Statistics Service. In nominal terms – without adjustments for inflation – December’s average salary was up 15.6% y/y. Nationwide, the average monthly salary was $506, almost three times the official minimum wage. Medical professionals enjoyed the biggest jump in salaries last year – 51%.
5​ UKRAINE Country Report​ February 2021 ​ ​www.intellinews.com