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3.1 Macroeconomic overview
Ukraine’s GDP dropped 0.5% y/y in January, according to an estimate published on March 6 in the monthly economic report of the Ministry of Economic Development, Trade and Agriculture.
The estimate is based on the General Production Index (GPI), which is based on manufacturing results during the period.
January’s production in all economic spheres except construction and domestic trade, the ministry said. The GPI declined 2.5% y/y in January, which was the basis for the estimated GDP decline of 0.5% y/y.
Construction slowed to 3.6% y/y growth in January vs. 20.9% y/y in December. As a result, it couldn’t offset the continued decline in industry. “It is likely the weak budget performance resulted in fewer construction assignments financed by the government,” said Evgeniya Akhtyrko of Concorde Capital said in a note.
Vox Ukraine, an influential group of largely free market economists, warned in an open letter Wednesday: “Ukrainian authorities have no time, and instability in the world requires fast and coordinated action.” Vox reminded: “In the event of a pandemic, global growth can stop completely, as it did in 2009 during the global financial crisis. That year, the Ukrainian economy contracted by 15% and the hryvnia depreciated by 37%.”
3.2 Macro outlook
Ukraine's GDP will decline by 4% if quarantine lasts up to three months and by 9% if it lasts longer, Head of Dragon Capital investment company Tomas Fiala has said.
"If quarantine in the main countries, in the EU, the United States and Ukraine, lasts for no more than three months and not until the second half of the year, if the number of infected people declines before the end of May and the
16 UKRAINE Country Report April 2018 www.intellinews.com
