Ukraine GDP declines 1.3% yoy in 2Q13

Ukraine’s GDP declined 1.3% yoy in 2Q13, according to updated state statistics released on September 10. The government’s provisional estimate for the quarter, released on July 31, was -1.1%.

Alexander Paraschiy: The 2Q13 GDP data was in line with our estimates. Poor industrial output through the quarter (-5.7% yoy), falling construction (-20.9% yoy) and subdued services (a meager +1.4% yoy in the trade sector) laid the groundwork for poor results. A surprise proved to be acceleration in private consumption (up to 7.3% yoy from 4.4% yoy in 1Q13). We anticipated further consumption declines in view of slowing retail trade.

We expect better GDP in 2H13 on the back of a record-high grain harvest, which should boost inventories through the autumn months. In particular, we forecast GDP will grow 0.4% yoy in 3Q13 and +1.0% in 4Q13, thereby resulting in near-zero growth for full-year 2013. Thus we are keeping our previous GDP estimate at +0.2% yoy for 2013.