GDP grows 5.2% yoy in 2011, to slow in 2012

Ukraine’s GDP grew 5.2% yoy in 2011 vs. 4.2% yoy in 2010 and above our estimate of 4.9%, according to preliminary data reported yesterday by UkrStat. In 4Q11, Ukraine’s GDP rose 4.6% yoy (vs. 3Q11’s 6.6% yoy) and 0.6% qoq (vs. 3Q11’s 2.2% qoq) if adjusted for seasonality.

Svetlana Rekrut: Data released previously on key industries clearly pointed to weaker GDP growth in 4Q11. Though a detailed GDP breakdown is not yet available, we estimate the agricultural sector was the main contributor to the growth in 4Q11. On the expenditure side, domestic demand (both private household expenditures and fixed capital investment) likely remained the only driver in 4Q11, with exports staying negative yoy, after dipping in 3Q11. We project Ukrainian economic growth will slow considerably this year to 1.9% yoy on persisting weakness in exports (projected to stay flat yoy in 2012), and should only be supported by private household consumption and investment demand.