Ukraine GDP declines 4.0% in 2020

Ukraine’s real GDP declined 4.0% yoy in 2020 after growing
3.2% yoy in 2019, the State Statistics Service reported on March 22. Nominal
GDP amounted to UAH 4,194 bln (USD 155.6 bln), increasing from UAH 3,978 bln
(USD 154.2 bln) in 2019. Real GDP dropped 1.2% yoy (-1.2% q/q) in 1Q20, 11.2%
yoy (-8.5% q/q) in 2Q20, 3.5% yoy (+8.5% q/q) in 3Q20 and 0.5% (+0.8% q/q) yoy
in 4Q20.

The economy contracted, as gross fixed investment
plummeted 24.4% yoy (vs. 11.7% yoy growth in 2019). In addition, the
contribution of net exports was negative with nominal imports (UAH 1,682 bln)
exceeding nominal exports (UAH 1,637 bln). Real exports declined 5.6% yoy (vs.
7.3% yoy growth in 2019), while real imports dropped 9.6% yoy (vs. 5.7% yoy
growth in 2019).

At the same time, private consumption remained on a
positive track, inching up 1.6% yoy (vs. 10.9% yoy growth in 2019).

On the production side, the major contributors to
economic decline were agriculture (-11.5% yoy), manufacturing (-6.0% yoy) and
transportation (-16.4% yoy). At the same time, growth was observed in trade
(+4.9%yoy), construction (+5.2% yoy), public administration & defense
(+1.5% yoy), information & telecommunication (2.3% yoy). The GDP deflator
amounted to 9.8% (vs. 8.2% in 2019).

Evgeniya Akhtyrko: The
reported 4Q20 GDP decline of 0.5% yoy turned out lower than the preliminary estimate of 0.7% yoy.
This resulted in a less than earlier estimated 2020 GDP decline.

We expect Ukraine’s GDP to advance 4.1% yoy in 2021
amid improved investment and accelerated consumptions. The expected growth of
imports will restrain economic growth.