Ukraine GDP drops 2.7% in January, ministry estimates

Ukraine’s real GDP
dropped 2.6-2.8% yoy in January, according to estimates published on March 10
by the Ministry of Economic Development. The estimates are based on the General
Production Index (GPI), which takes into account manufacturing results during
the period.

In January, GPI
dropped 4.0% yoy (vs. 2.5% yoy decline in January 2020), the ministry
estimated. The negative trend was observed in industry, construction,
agriculture and transportation. There three sectors contributed the most to the GDP
decline in January.

Evgeniya Akhtyrko: January’s GDP estimate is
discouraging. The comparative base of January 2020 was low (-0.5% yoy), so
Ukraine’s output is still at its lows. Poor economic results in January might
be partially attributed to the quarantine restrictions on Jan. 8-24. However,
the scale of the latest nation-wide quarantine was nothing to compare with the
one in March-May 2020 when the economic activity was practically paralyzed
given the shutdown of the public transportation and many businesses.

Given a weak January
result, Ukraine’s GDP in 1Q21 is likely to be in decline. We expect Ukraine’s
GDP to increase 4.1% yoy in 2021.