Ukraine GDP dropped 6.5% yoy in 1H20, ministry estimates

Ukraine’s real GDP dropped 6.5% yoy in 1H20, deepening
from estimated 5.9% yoy decline in 5M20,
according to an estimate published on Aug. 6 in the report of the Ministry of
Economic Development. In 2Q20, GDP collapsed 11.0% yoy (down from 1.3% yoy drop in 1Q20), the
ministry estimates. The estimate is based on the General Production Index
(GPI), which takes into account the manufacturing results during the period.

In 1H20, GPI dropped 7.7% yoy, slightly deepening from
a 7.6% yoy decline in 5M20, the ministry estimated. The ministry notes that the
second quarter marked the most negative economic effects from the severe
quarantine/lockdown. In June, the decline slowed down in some sectors of
industrial production, transportation and construction. At the same time,
agricultural production plunged 18.7% yoy in June because of set-aside land and
lower yields.

Evgeniya Akhtyrko: Our
forecast of the 2Q20 GDP drop is close to
the latest government estimate. We expect the economic decline to slow down in
2H20, with ongoing adverse effects from the global markets and the unfavorable
investment environment in the country.

Our forecast is for Ukraine’s real GDP to drop 5.8%
yoy in 2020 (vs. 3.2% yoy growth in 2019).