Investments in Ukraine fixed assets increase 0.7% yoy in 1Q16

Investments in Ukraine’s fixed assets increased 0.7% yoy in 1Q16, the first positive quarter in exactly three years, the State Statistics Service of Ukraine revealed on May 25. Investment in agriculture surged 56.5% yoy, trade +49.0% yoy, transport +11.6% yoy, while investment in industry rose 4.9% yoy. At the same time, investment fell in communication (-74.7% yoy) and construction (-0.9% yoy).

Alexander Paraschiy: The first-quarter result is a positive signal. To a large extent, we simply see the effect of a low comparative base. Still it’s one more sign that Ukraine is on the path to recovery. Though the number is somewhat better than we initially expected, we are not rushing to revise our full-year forecast. The drop in investments slowed towards the end of last year, which means the effect of the low comparative base this year will also decline accordingly, especially since Ukraine’s economic recovery is still fragile. Thus we are keeping our forecast for investments in fixed assets unchanged at 1.1% yoy growth for 2016.