Page 19 - UKRRptJul21

Retail sales surged 34.3% y/y following growth of 13.1% in March.
Industrial production growth climbed to 13% in April from 2.1% in March, mainly thanks to manufacturing (18% growth in April versus 2.5% growth in March).
Agriculture was the laggard, with output slipping 4.6% following a decline of 2.3% in March. Ukraine’s agricultural sector was set back by drought and farmers took in a smaller harvest than expected. Global warming is expected to slowly depress Ukraine’s grain output in the coming decades.
GDP shrank 2% y/y in 1Q21 after easing 0.5% in 4Q20. We expect the speed of the recovery to peak in April, after which we anticipate a slowdown as the low base effect disappears. We project GDP growth of 4% this year.
3.2 Macro outlook
The European Bank for Reconstruction and Development (EBRD) has improved its forecast for the economic growth in Ukraine in 2021 from 3% to 3.5%, according to its June forecast. GDP is expected to grow by 3.5% in both 2021 and 2022, the EBRD said in its June regional economic prospects. According to the report, the main risks are associated with the slow progress of reforms in the country and the relatively slow pace of vaccination, the bank's analysts say. Although the economy contracted 2% year-on-year in the first quarter of 2021 due to prolonged quarantine restrictions, there are indications that it is gradually returning to growth in the second quarter thanks to higher commodity prices, the EBRD said.
19 UKRAINE Country Report July 2021 www.intellinews.com