UkrStat confirms 2Q19 real GDP growth at 4.6%

Ukraine’s real GDP rose 4.6% yoy in 2Q19, or 1.6% qoq
on a seasonally adjusted basis, to UAH 928 bln (USD 34.9 bln), the State
Statistics Service reported on Sept. 18, confirming its preliminary estimate. The
acceleration in economic growth (from 2.5% yoy 1Q19) was mostly due to
advancement in private consumption, which swelled 11.8% yoy (vs. 10.7% yoy
growth in 1Q19).

Meanwhile, investment growth slowed to 7.9% yoy (vs.
17.4% yoy growth in 1Q19). The contribution of net exports to GDP remained negative
as import volume exceeded export volume. Real export growth slowed to 4.4% yoy
(vs. 6.8% yoy growth in 1Q19) while imports accelerated to 9.1% yoy (vs. 6.5%
yoy growth in 1Q19).

On the production side, stronger GDP growth in 2Q19
was mostly due to accelerated value-added growth in agriculture (7.3% yoy in
2Q19 vs. 3.4% yoy in 1Q19), and mining (3.5% yoy growth in 2Q19 vs. 0.4% yoy in
1Q19). In addition, the value added in manufacturing increased 0.8% yoy (vs. a
1.3% yoy decline in 1Q19). 

The value added in construction continued to grow at
high rates, though cooling to 20.5% yoy (vs. 26.5% yoy in 1Q19).

The GDP deflator amounted to 9.4% in 2Q19 (vs. 11.7%
in 1Q19).

Evgeniya Akhtyrko: Surging
private consumption was the major driving force of accelerated growth in 2Q19.
Meanwhile, investment growth slowed down. Moreover, the negative contribution
of net exports to GDP was reinforced by accelerated growth in real imports and
slowing real export growth.

We expect economic growth to weaken in 2H19. Firstly,
agricultural growth will be lower due to a high comparative base effect.
Secondly, the performance of mining and manufacturing is not likely to advance
significantly.

We expect Ukraine’s GDP to increase 3.1% yoy in
2019 (vs. 3.3% yoy in 2018).