Ukraine real GDP plunges 9.9% in 2015
22 March 2016
Ukraine’s real GDP plunged 9.9% yoy in 2015, according to an UkrStat report on March 21. Nominal GDP reached UAH 1,979.5 bln, or USD 90.6 bln, we estimate based on average official exchange rate. Private consumption fell 20.2% yoy while government consumption increased 1.0% yoy in 2015. Investment in fixed assets decreased 9.3% yoy. Real exports fell 16.9% yoy while imports plunged 22.0% yoy. On a positive note, GDP decline has been bottoming out, dropping -17.0% yoy in 1Q15, -14.7% yoy in 2Q15, -7.2% yoy in 3Q15 and -1.4% yoy in 4Q15.
Alexander Paraschiy: The 2015 GDP results are somewhat better than our projection of -10.4% yoy. The main factors for this is a slower decline in private consumption in 4Q15 (-13.1% yoy vs. -19.3% yoy in 3Q15), as well as better performance of exports (-5.8% yoy vs. -17.3% yoy in 3Q15).
Though the economic depression is bottoming out, we can hardly talk about economic recovery soon. Domestic demand will remain weak owing to sluggish revenue while investments are not on the horizon amid the unfolding political crisis. Rising global commodity prices are a positive signal from the global markets, but we don’t believe they will last long. Against this backdrop, we do not see any reason to revise our forecast of 0.6% yoy GDP growth for 2016.
