Ukraine 2Q16 GDP growth revised to 1.4% yoy

Ukraine’s 2Q16 GDP growth statistics was revised up to 1.4% yoy growth from 1.3% yoy growth estimated previously, the State Statistics Service reported on Sept. 19. 2Q16 nominal GDP was UAH 531.8 bln, 16.8% more than a year ago.

Private consumption grew 4.3% yoy in real terms compared to -2.1% yoy in 1Q16, government consumption fell 2.4% yoy after no growth in 1Q16, and gross capital accumulation surged 17.6% yoy after 4.2% yoy growth in 1Q16. The decline in real exports deepened to -6.5% yoy from -3.8% yoy in 1Q16. Real imports slid -0.1% yoy after a -7.2% yoy drop in the previous quarter.  

Alexander Paraschiy: Investment growth was stronger than our expectation of 3.9% yoy growth in 2Q16. This positive trend was offset by the external trade performance, which was much worse than we expected owing to worsening exports and recovering real imports. In the meantime, private consumption was perfectly in line with our initial view.

In 2H16, we anticipate private consumption to strengthen. At the same time, investment growth will ease due to a higher statistical base for gross capital accumulation. What’s more, we anticipate a larger negative contribution of net exports due to a stronger increase in real imports (on the back of recovering energy imports) amid still sluggish real exports. Current trends indicate that 2H16 GDP growth might be closer to 1.1% yoy, weaker than 1.6% yoy we projected initially. For the full year however, we expect growth to be close to our initial forecast of 0.9% yoy.