Ukraine 2Q18 real GDP growth estimate improved to 3.8% yoy

Ukraine’s real GDP rose 3.8% yoy in 2Q18, or 1.0% qoq
on a seasonally adjusted basis, the State Statistics Service reported on Sept.
18, improving its preliminary estimate of 3.2% yoy growth.
Real GDP accelerated from 3.1% yoy growth in 1Q18.

Private consumption grew 4.2% yoy in 2Q18, slowing
from 5.6% yoy growth in the previous quarter. At the same time, public
consumption surged 11.2% yoy in 2Q18, accelerating from a 1.4% yoy decline in
1Q18. Investment rose 14.2% yoy in 2Q18, slowing from 17% yoy growth in 1Q18.
The impact of net export was negative, as import growth of 3.0% outpaced export
growth, which inched up 0.1% yoy.

On the production side, the major contributors to 2Q18
economic growth were agriculture (19.3% yoy) and manufacturing (2.0% yoy). The
GDP deflator amounted to 17.0% (vs. 14.9% in 1Q18).

Evgeniya Akhtyrko: The 2Q18
boost in agriculture was mostly caused by shifted seasonality in production
because of unusually warm weather in May-June. Meanwhile, the growth in
manufacturing – Ukraine’s largest production sector – remains relatively slow.

Cooling growth of private consumption, which is the
major factor of economic advancement, might indicate that we are likely to see
slower economic growth in 2H18, amid the negative contribution of net exports.

We forecast 2018 real GDP growth at 3.3% yoy.