Page 14 - UKRRptOct21

33.7% more y/y. The GDP deflator amounted to 26.4% in 2Q21.
GDP growth was mostly driven by private consumption, which advanced 17.4% y/y in 2Q21. In addition, gross fixed investment picked up 14.8% y/y. Public consumption inched up 2.9% y/y. At the same time, the contribution of external trade was negative with real exports plunging 6.2% y/y and imports surging 21.5% y/y.
On the production side, economic advancement was mostly due to the growth in manufacturing (8.2% y/y), financial and insurance services (17.8% y/y) and transportation (9.6% y/y). At the same time, the value added dropped in agriculture (-10.6% y/y), public administration (-4.7% y/y), and electricity & gas supply (-1.9% y/y).
Ukraine’s GDP grew by only 2.1% from January-July, compared to the same period last year, the Economy Ministry reported yesterday. This anemic growth failed to compensate the 6.1% plunge in January-July 2020, compared to the same period in 2019. Despite high prices for metals and grains, rising gas prices are eating up export earnings and “the construction industry did not live up to expectations,” the Ministry said.
Final government GDP figures show a mild improvement for the second quarter, but still a fall of 0.7% and a technical recession for the first half of this year. Q2 GDP grew by 5.7% yoy, according to the State Statistics Service. Alfa-Bank Ukraine and the National Bank of Ukraine predict that Ukraine’s GDP will grow by 3.7% this year, not enough to compensate for the 2020 contraction of 4%. Alfa-Bank writes: “That is still surprisingly low, leaving Ukraine’s economy 6% below pre-COVID 2019, one of the worst outcomes in Europe...This disappointing GDP data print still demonstrates a very strong recovery. Household consumption jumped 17.4% y-o-y in real terms in the second quarter of 2021, emerging 6% above pre-COVID level. Investment added 14.8% y-o-y, narrowing its gap to pre-COVID from 27% in the first quarter to 12% in 2Q21.”
Ukraine's basic sector output, a proxy for GDP growth, climbed 2.3% y/y in July after rising 1.7% in June. The uptick was driven by the agricultural sector, which posted growth of 9.2% y/y following a 16.0% contraction in June. Growth weakened in other sectors. Industrial production growth eased from 1.1% to 0.2% y/y due to a 1.8% drop in manufacturing output, retail trade growth slowed from 13.0% to 10.1% y/y (which is still solid given the high base from last year) and construction activity slid 0.5% after surging 21% y/y in June.
14 UKRAINE Country Report October 2021 www.intellinews.com