Ukraine confirms 3.1% real GDP growth in 1Q18

Ukraine’s real GDP rose 3.1% yoy in 1Q18, or 0.9% qoq
on a seasonally adjusted basis, the State Statistics Service reported on June
19, confirming its preliminary estimate. Real GDP
accelerated from a 2.2% yoy growth in 4Q17.

Private consumption, which grew 5.6% yoy in 1Q18,
remained the major driver of GDP growth, while investment rose 5.8% yoy. In
addition, the negative impact of net exports on GDP growth diminished amid a
reported decline in real imports by 5.4% yoy in 1Q18 (vs. a 20.2% yoy growth in
4Q17).

On the production side, growth was led by the trade
(5.8% yoy) and manufacturing (2.7% yoy) sectors, while agriculture (-0.5% yoy)
served as the restraining factor. The GDP deflator amounted to 14.9% (vs. 20.9%
in 4Q17).

Evgeniya Akhtyrko: Boosted
growth in the trade sector, which is defined as value-added services performed,
helped to compensate for declines in the real economy, defined as industrial
performance and agriculture. Fueled by high private demand, the trade sector
will continue to play an important role in economic growth throughout 2018. We
also expect the agricultural sector to pick up in 2H18 after a 2.5% yoy decline
in 2017. We forecast 2018 real GDP growth at 3.3% yoy compared to 2.5% yoy
growth in 2017.