Ukraine GDP rises 2.5% in 2017, updated statistics shows

Ukraine’s real GDP rose 2.5% in 2017, the State
Statistics Service reported on March 21. Real GDP grew 2.8% yoy (0.1% q/q) in
1Q17, 2.6% yoy (0.8% q/q) in 2Q17, 2.4% yoy (0.5% q/q) in 3Q17 and 2.2% (0.5%
q/q) yoy in 4Q17.

Economic growth was driven by investment in 2017,
which increased 18.2% yoy (vs. 20.4% yoy in 2016). Meanwhile, private
consumption growth  accelerated to 7.8% yoy from 2.1% yoy in 2016, playing
a bigger role in GDP growth. The contribution of net exports remained negative
with real export growth of 3.5% yoy (a decrease of 1.8% yoy in 2016) being
outpaced by a 12.2% yoy rise in real imports (19.4% yoy in 2016).

On the production side, the growth was led by
manufacturing (5.1% yoy), construction (26.9% yoy) and trade (5.0% yoy), while
declines in agriculture (-2.5% yoy) and mining (-5.9% yoy) were restraining
factors. The GDP deflator amounted to 22.0% (vs. 17.1% in 2016).

Evgeniya Akhtyrko: The GDP
statistics for both 4Q17 and full-year 2017 proved to be a positive surprise in
exceeding preliminary state estimates that shot for 2.1% for 2017, which
assumed a stronger slowdown in 4Q17 to 1.8% yoy growth.

Apparently, a fall in agriculture (-6.4% yoy in 4Q17),
caused by a drop in the grain harvest, turned out to be less severe than
previously estimated, while the situation in mining, harmed by a trade blockade
with occupied Donbas, improved faster than expected (-7.2% yoy in 1Q17, -5.4%
yoy in 2Q17, -6.2% yoy in 3Q17, -5.0% yoy in 4Q17).

For 2018, we anticipate economic growth
accelerating to 3.3% yoy.