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y/y in 3Q20 (vs. a 22.3% y/y drop in 2Q20). At the same time, private consumption inched up 1.0% y/y (vs. a 10.4% y/y plunge in 2Q20). In addition, public consumption advanced 8.2% y/y (vs. a 1.7% y/y drop in 2Q20). Real exports slid 7.2% y/y, while imports fell 10.1% y/y.
On the production side, the economy was mostly affected by falls in (1) agriculture of 11.1% y/y in 3Q20 (vs. a 29.1% y/y decline in 2Q20), (2) manufacturing of 5.6% (vs. 14.7 y/y drop in 2Q20) and (3) transportation of 8.4% y/y (vs. a 14.7% y/y drop in 2Q20). At the same time, construction picked up 8.2% y/y (vs. a 6.2% y/y decline in 2Q20), while trade advanced 9.7% y/y (vs. a 5.6% y/y drop in 3Q20).
The GDP deflator amounted to 7.9% in 3Q20 (vs. 5.0% in 2Q20).
Off the books transactions account for “somewhere over 50%” of GDP,
Danil Getmantsev, ruling party MP and chair of the Rada committee on finance, tax and customs policy, told Radio Liberty. He called it “too optimistic” and Ernst & Young estimated earlier this year 24% of GDP. Even this rate is “terrible” as the government seeks to move Ukraine toward a tax-paying, EU standard economy.
Ukraine’s real GDP dropped 5.2% y/y in 10M20, improving from a 5.5% y/y decline in 9M20, according to estimates published on December 9 by the Ministry of Economic Development. The estimates are based on the General Production Index (GPI), which takes into account manufacturing results during the period.
In 10M20, GPI dropped 6.0% y/y, improving from a 6.2% y/y decline in 9M20, the ministry estimated. In October, the trends improved in transportation, trade, and construction. At the same time, the decline in agriculture remains deep, and production in most industrial sectors remains depressed.
“The decline of Ukraine’s economy is slowing down. We expect GDP in 4Q20 to decline 2.2% y/y compared to 3.6% y/y in 3Q20. Ukraine's GDP will conclude the year at around a 4.6% y/y drop compared to 3.2% y/y growth in 2019, according to our forecast,” an analyst at the Kyiv-based Concorde Capital brokerage, said in a research note.
13 UKRAINE Country Report January 2021 www.intellinews.com
