Ukraine GDP rises 4.1% in 3Q19, based on clarified data

Ukraine’s real GDP rose 4.1% yoy in 3Q19, or 0.6% qoq
on a seasonally adjusted basis, to UAH 1,405 bln (USD 43.8 bln), the State
Statistics Service reported on Dec. 19, adjusting downward its preliminary estimate of 4.2% yoy, or 0.7% qoq growth.
Economic growth slowed from 4.6% yoy in 2Q19mostly due to weaker real growth of private consumption, which advanced 8.5%
yoy, slowing from 11.8% yoy in 2Q19.

Meanwhile, investment growth accelerated to 13.9% yoy
(vs. 7.9% yoy growth in 2Q19). The contribution of net exports to GDP remained
negative. Real export growth advanced to 13.5% yoy (vs. 4.4% yoy growth in
2Q19), while imports slowed to 6.2% yoy growth (vs. 9.1% yoy growth in 2Q19).

On the production side, weaker GDP growth in 3Q19 was
mostly due to slower value-added growth in agriculture (6.0% yoy in 3Q19 vs.
7.3% yoy in 2Q19) and a decline in manufacturing of 0.4% yoy (vs. 0.8% yoy
growth in 2Q19).

The value-added in construction continued to grow
fast, advancing to 20.6% yoy (vs. 20.5% yoy in 2Q19).

The GDP deflator declined to 6.8% in 3Q19 from
9.4% in 2Q19.

Evgeniya Akhtyrko: It looks
like private consumption growth, which is Ukraine’s main economic driver, has
started cooling. Meanwhile, the negative contribution of net exports to GDP
softened in 3Q19, as real export growth significantly outpaced the growth of
imports.

We expect economic growth to weaken significantly in
4Q19. The decline in manufacturing will intensify, while we expect mining
output to switch into the red. Additionally, agricultural output is expected to
be much weaker.

We expect Ukraine’s GDP to have increased 3.5% yoy
in 2019 (vs. 3.3% yoy growth in 2018).