Ukraine GDP increases 4.7% in 4Q16
14 February 2017
In 4Q16, Ukraine’s GDP increased 4.7% yoy, according to State Statistics Service report on Feb. 14. The IMF anticipated 1.5% GDP growth in Ukraine in 2016. The Ministry of Economy estimated 2.0% GDP growth in 2016.
Alexander Paraschiy: The fourth quarter GDP growth was above our estimates (we expected +1.5% yoy through the quarter). Strong agro-production (+27.8% yoy in 4Q16) on the back of a good grain harvest was the main reason for the impressive GDP result. For the year 2016, we estimate a 2.3% yoy GDP increase.
Though the economy is performing stronger than we expected, we keep our reservations on the prospects for 2017. Agro-production can be volatile and we can hardly rely on impressive agro-performance for two years in row. Moreover, recovering consumption is expected to generate stronger demand for imports with a subsequent impact on balance of payments and the hryvnia exchange rate. At the meantime, the prospects for exports still remain quite uncertain. All in all, we expect GDP growing close to current levels in 2017. Against this backdrop, we still keep our initial projection of GDP growth in 2017 unchanged at 2.1% yoy. However, mark the number for potential revision after more hard data on real sector performance is released.
