Ukraine GDP drops 2.2% in 1Q21, based on revised data

Ukraine’s real GDP plunged 2.2%
yoy in 1Q21, the State Statistics Service reported on June 22, worsening its preliminary estimate of -2.0% yoy.
The economy declined 1.2% qoq seasonally adjusted.

Ukraine nominal GDP amounted to UAH 1,009 bln (USD
36.1 bln) in 1Q21, which is 18.1% more yoy. The GDP deflator amounted to 20.7%
in 1Q21.

The real change was weighed down by a gross fixed
investment plunge of 7.8% yoy in 1Q20. The contribution of external trade was
also negative with real exports plunging 17.4% yoy and imports advancing 3.7%
yoy. At the same time, private consumption picked up 4.4% yoy. In addition, public
consumption advanced 3.2% yoy.

On the production side, the economy was mostly
affected by falls in trade (-4.9% yoy), transportation  (-8.3% yoy),
manufacturing (-2.8% yoy) and construction (-12.7% yoy). At the same time, the
value added advanced in financial and insurance services (9.6% yoy), in real
estate operations (4.4% yoy), information technologies (4.8% yoy) and
electricity & gas supply (4.2% yoy).

Evgeniya Akhtyrko: Ukraine’s
economic performance was very weak in 1Q21, especially given the quite low
comparative base of 1Q20 (GDP declined 1.2% yoy in 1Q20). The plunge in
investment is an indicator of a poor financial state and the overall confidence
of Ukraine’s businesses.

Exports looked quite impressive in money terms
in 1Q21, but a high respective deflator (44.1%) turned the real result to the
red.

We expect Ukraine’s economy will increase 4.1% yoy in
2021 (vs. a 4.0% yoy decline in 2020).