Page 25 - UKRRptJul19

Nominal GDP, USD bln
180 117 136 163 176 183 134 91 93 112 131 146
3,891 2,550 2,972 3,580 3,865 4,030 3,117 2,134 2,193 2,638 3,077 3,336
22.3% 12.3% 9.1% 4.6% -0.2% 0.5% 24.9% 43.3% 12.4% 13.7% 9.8% 7.10%
25.2% 15.9% 9.4% 8.0% 0.6% -0.3% 12.1% 48.7% 13.9% 14.4% 10.90% 8.20%
GDP per capita, USD
CPI(eop)
CPIaverage
Unemployment (ILO methodology, avg)
Source: SP Advisors
6.9% 9.6% 8.9% 8.7% 8.2%
7.8%
9.7%
9.5%
9.7%
3.1 Macroeconomic overview
9.9% 9.1% 8.00%
Ukraine GDP rose 2.5% in 1Q19, updated stats show. Ukraine’s real GDP rose 2.5% y/y in 1Q19, or 0.3% q/q on a seasonally adjusted basis, to UAH808bn ($29.6bn), the State Statistics Service reported on June 19, revising upward its preliminary estimate of 2.2% y/y and 0.2% q/q growth. Ukraine’s economy grew 3.5% y/y in the fourth quarter of 2018.
Private consumption swelled 10.7% y/y in 1Q19, accelerating from 8.5% y/y growth in the previous quarter. At the same time, public consumption declined 8.3% y/y in 1Q19 (vs. a 2.4% y/y drop in the fourth quarter of 2018). Investment advanced 17.4% y/y in 1Q19, accelerating from 10.2% y/y growth in the fourth quarter of 2018. At the same time, gross accumulation of the capital plummeted 32.9% y/y (vs. 3.8% y/y decline in the fourth quarter of 2018) due to falling inventories.
In 1Q19, exports climbed 6.8% y/y (vs. 0.4% y/y growth in the fourth quarter of 2018) and outpaced imports, which grew 6.5% y/y (vs. 2.8% y/y in the fourth quarter of 2018). However, the contribution of net exports to GDP growth was negative as import volume exceeded export volume.
On the production side, the weaker GDP growth in 1Q19 was mostly due to slower value-added growth in agriculture (3.4% y/y in 1Q19 vs. 13.5% y/y in the fourth quarter of 2018), trade (1.1% y/y in 1Q19 vs. 1.6% y/y in the fourth quarter of 2018) and mining (0.4% y/y in 1Q19 vs. 2.6% y/y in the fourth quarter of 2018). The value added in manufacturing declined 1.3% y/y in 1Q19 (vs. 2.8% y/y in the fourth quarter of 2018). Meanwhile, the contribution of construction –, which surged 26.5% y/y (vs. 7.6% y/y in the fourth quarter of 2018) – to overall economic growth increased.
The GDP deflator amounted to 11.7% (vs. 13.5% in the fourth quarter of 2018).
The surge in the construction sector generated a better-than-expected GDP result in 1Q19. However, swings in the performance of the construction sector are common so they cannot be viewed as a reliably consistent generator of value-added growth in the economy. Meanwhile, the decline in manufacturing – one of Ukraine’s leading production sectors – continues to dampen overall economic growth.
Analysts expect Ukraine’s GDP to increase 2.4% y/y in 2019 (vs. 3.3% y/y in 2018). The slower economic growth will be mostly due to a weaker year-end result in agriculture.
Ukraine’s shadow economy was circa 30% of GDP in 2018 – its lowest level in 11 years, the Ministry of Economic Development and Trade of Ukraine
25 UKRAINE Country Report July 2019
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