Ukraine GDP falls 5.3% yoy in 3Q14

Ukraine’s GDP fell 5.3% yoy in 3Q14, according to state statistics released on Dec. 10. This is slightly worse than the preliminary estimate of -5.1% yoy released by UkrStat on Oct. 30. Investments in fixed assets plunged 29.9% yoy, private consumption fell 13.0% yoy, and government consumption declined 0.7% yoy in the quarter. Real exports slumped 19.3% yoy while real imports plunged 32.2% yoy. Nominal GDP was reported at UAH 428.2 bln, thus reflecting 14.5% yoy GDP deflator growth in 3Q14.

Alexander Paraschiy: The third-quarter figures indicate that real GDP declined only 3.9% yoy in 9M14, which is not bad for a country that has been in political turmoil and military conflict for most of the year. The decline might have been much deeper if not for the fast shrinking external trade deficit and strong grain harvest. Unless the economy dramatically worsens over the upcoming weeks, we anticipate GDP to have dropped 6% yoy in 2014.

In regards to 2015 prospects, we anticipate a modest GDP recovery at 1.3% yoy, net of occupied Donbas. The country’s central and western regions are already reporting positive dynamics from enhanced access to EU markets. Unless a new military escalation happens, we expect the rest of the country to follow this trend.