GDP up est. 4.8% y-o-y in 10M10

Ukraine’s real GDP grew 4.8% y-o-y in 10M10, up from 4.7% y-o-y in 9M10, according to estimates published by the NBU yesterday.
Partially, the recent GDP growth acceleration is explained by temporal factors such as a later (vs. the last year) harvest and abrupt electricity demand increase on the back of falling temperatures in October. More broadly, recent positive GDP movement is derived from recovering domestic demand, both consumer (retail sales up 10.7% y-o-y in October in real terms, after a 10.4% rise in September) and investment (construction was up 15.2% y-o-y in October). The latter is chiefly explained by government spending on infrastructure projects as part of Euro 2012 preparations. We also see external demand remaining stable as the export-oriented metallurgy and machinery sectors continue to exhibit solid growth (12.3% y-o-y and 32.9% y-o-y in 10M10 respectively). As low base effect from last year continues to fade, we expect real growth to decelerate in the months ahead and see GDP to rise some 4.3%-4.5% for the whole year 2010.