Ukraine GDP declines 1.1% yoy in 1Q14

Ukraine’s real GDP fell 1.1% in 1Q14, according to UkrStat provisional estimate released on April 30. In 2013,real GDP was reported flat yoy.

Alexander Paraschiy:  It looks like the Ukrainian economy is performing somewhat better than we expected.  We had estimated 1Q14 GDP to fall 3.4% yoy while the reduction appears to be much more modest.  In fact, it is quite strange to see such a result for GDP against the backdrop of a 5% reduction in industrial output throughout the first quarter.  Usually, GDP closely follows industrial performance.  These statistics make us assume that some structural changes due to the annexation of Crimea (UkrStat might have updated methodology) or even some economic deshadowing might stand behind this result. We are keeping our initial forecast at -3.7% yoy for GDP in 2014 since the main negative effect on internal consumption due to devaluation and frozen budget spending is still ahead.