Ukraine GDP picks up 5.7% in 2Q21, based on revised data

Ukraine’s real GDP increased 5.7% yoy in 2Q21, the
State Statistics Service reported on Sept. 20, improving its preliminary estimate of 5.4% yoy.
Meanwhile, the economy declined 0.7% qoq on a seasonally adjusted basis (vs. a
previously reported decline of 0.8% qoq).

Ukraine’s nominal GDP amounted to UAH 1,169 bln (USD
42.4 bln) in 2Q21, which is 33.7% more yoy. The GDP deflator amounted to 26.4%
in 2Q21.

GDP growth was mostly driven by private consumption,
which advanced 17.4% yoy in 2Q21. In addition, gross fixed investment picked up
14.8% yoy. Public consumption inched up 2.9% yoy. At the same time, the
contribution of external trade was negative with real exports plunging 6.2% yoy
and imports surging 21.5% yoy.

On the production side, economic advancement was
mostly due to the growth in manufacturing (8.2% yoy), financial and insurance
services (17.8% yoy) and transportation (9.6% yoy). At the same time, the value
added dropped in agriculture (-10.6% yoy), public administration (-4.7% yoy),
and electricity & gas supply (-1.9% yoy).

Evgeniya Akhtyrko: Given the
huge economic downfall in 2Q20 (-11.2% yoy), the GDP growth of 5.7% yoy in 2Q21
is not impressive, meaning that the country’s output is still below the
pre-pandemic level. The recovery in investment is not enough to cover the fall
of the previous year. Exports look quite impressive in money terms, but a high
respective deflator (58.9%) turned the real result to the red.

The slow recovery of Ukraine’s economy after the
pandemic crisis indicates its overall structural weakness and low resilience to
shocks. We are observing mid- and long-term effects of the havoc wreaked by the
pandemic, which brought the disruption of many economic liaisons and the
failure of auxiliary businesses.

We stll expect Ukraine’s economy will increase 4.1%
yoy in 2021 (vs. a 4.0% yoy decline in 2020).