Ukraine GDP plunges 15.2% yoy in 4Q15

Ukraine’s real GDP plunged 15.2% yoy in 4Q15, according to Ukrstat on Feb. 16. The figure excludes Crimea and the occupied territories of the Donetsk and Luhansk regions.

Alexander Paraschiy: The result is in line with our estimates, which means that for 2014, GDP plunged about 7.0% yoy. We estimate nominal GDP in 2014 to have been slightly above UAH 1.50 trln. For this year, state authorities estimate real GDP falling 5.5% yoy and nominal GDP growing more than 20% yoy to UAH 1.85 trln on the back of 26% inflation. We are more optimistic on real GDP for 2015, expecting it to fall 3.8% yoy on the bet that external accounts will improve on further hryvnia devaluation. However, we are more conservative than the government in forecasting nominal GDP growth, disregarding the stronger inflation, since higher prices will cut into consumption. Thus, we expect nominal GDP not much higher than UAH 1.70 trln in 2015.