Ukraine GDP increased 2.7% in 3Q21, based on revised data

Ukraine’s real GDP increased 2.7% yoy in 3Q21, the State
Statistics Service reported on Dec. 20, improving its preliminary estimate of 2.4% yoy.
The economy picked up 1.5 % qoq on a seasonally adjusted basis (vs. a
previously reported increase of 1.4% qoq).

Ukraine’s nominal GDP amounted to UAH 1,498 bln (USD
55.5 bln) in 3Q21, which is 28.9% more yoy. The GDP deflator amounted to 25.5%
in 3Q21.

GDP growth was mostly driven by gross fixed
investment, which advanced 14.5% yoy in 3Q21. In addition, gross private
consumption picked up 9.0% yoy. At the same time, public consumption slid 1.0%
yoy. The contribution of external trade was negative with real exports plunging
8.6% yoy and imports jumping 12.3% yoy.

On the production side, economic advancement was
mostly due to the growth in agriculture (5.1% yoy), financial and insurance
services (7.6% yoy), information & telecommunication (5.4%) and
transportation (4.1% yoy). At the same time, the value added dropped in manufacturing
(-0.6% yoy), public administration (-8.9% yoy), and electricity & gas
supply (-0.1% yoy).

Evgeniya Akhtyrko: Given the
economic drop of 3.5% yoy in 3Q20, the GDP growth of 2.7% yoy in 3Q21 means
that the country’s output is still below the pre-pandemic level. The role of
investment as a major driving force in the economic recovery in 3Q21 should not
be overestimated as it is just a recovery from a 24% yoy investment plunge in
the previous year.

By and large, the economic growth in 3Q21 was due to
an advancement in agriculture amid record-highs of some crops. Meanwhile, the
performance of other non-service sectors was weak, indicating that the negative
impact of the COVID-crisis will be long-lasting.

We still expect Ukraine’s economy will increase 3.2%
yoy in 2021 (vs. a 4.0% yoy decline in 2020).