Ukraine GDP drop slows to 5.5% in 9M20, ministry estimates

Ukraine’s real GDP dropped 5.5% yoy in 9M20, improving
from a 5.8% yoy decline in 8M20, according to estimates published on Oct. 5 by
the Ministry of Economic Development. The ministry estimates the GDP decline in
3Q20 at 3.6% yoy.

The estimates are based on the General Production
Index (GPI), which takes into account manufacturing results during the period.

In 9M20, GPI dropped 6.2% yoy, improving from a 6.5%
yoy decline in 8M20, the ministry estimated. In September, the trends improved
in some sectors of industrial production, transportation, trade, construction.
At the same time, the decline in agriculture deepened, while the transportation
sector is still depressed.

Ukraine’s GDP will have fallen 4.8% yoy in 2020 (with
a 3.0% yoy decline in 4Q20), the ministry predicted. In case the government
introduces another strict lockdown, Ukraine’s GDP may fall by 6.0% in 4Q20 and
by 5.6% in 2020, the the ministry estimates.

Evgeniya Akhtyrko: Accelerated
renewal in construction, which has been prompted by government spending in road
building and consumer demand, remains the major factor of economic restoration.

Ukraine GDP will conclude the year at a 4.5% yoy drop
(vs. 3.2% yoy growth in 2019), according to our forecast. The government won’t
likely resort to strict nationwide quarantine restrictions despite the recent
records in COVID-19 infections.