GDP grows 6.3% yoy in 1H08

Ukraine’s real GDP rose 6.3% yoy in 1H08 (vs from growth of 6.4% yoy in 5M08), the State Statistics Committee reported on Tuesday. GDP deflator was 33.5% yoy in 1H08, up from 33.1% yoy in 5M08. Polina Khomenko: The slowdown in GDP growth is caused mostly by deceleration in the retail and processing industry – the main GDP contributors. We attribute this easing to tightening on lending conditions and cooling investment growth (down to 13.9% yoy in 1Q08 from 25.1% in 4Q07). We expect that upcoming surge in agricultural output will support GDP growth. Agricultural output grew at 0.1% yoy in 1H08, but we argue that a plentiful harvest will boost this growth to 7.0% yoy in 2008.  We stick to our forecast of real GDP growth of 6.8% yoy in 2008.