Ukraine Economic Forecast

Ukraine Economic Outlook

September 8, 2020

The economy entered recession in Q2, with GDP contracting at the sharpest annual pace in five years due to the Covid-19 fallout. Although more comprehensive data is yet to be released, domestic demand likely reeled amid strict measures to contain the virus’ spread. The external sector also languished, as evidenced by goods exports plunging at a double-digit rate in the quarter. Looking at Q3, retail sales recovered some strength in July, which, coupled with climbing consumer confidence in the same month, hints that demand is slowly firming. That said, the recent surge in new coronavirus cases, which has prompted authorities to extend restrictions until the end of October, may restrain the fragile recovery, particularly in the services sector. Meanwhile, on 29 August, President Zelensky signed into law a 5.9% minimum wage hike, effective from 1 September, boding well for consumer demand.

Ukraine Economic Growth

Economic activity is set to plunge this year as the Covid-19 outbreak and associated restrictions hammer both domestic and foreign demand. That said, government support to households and businesses, combined with monetary stimulus, should help to mitigate the downturn somewhat. A second wave of virus infections clouds the outlook. FocusEconomics panelists see GDP falling 5.3% in 2020, which is down 0.1 percentage points from last month’s forecast. In 2021, they see it expanding 4.2%.

Ukraine Economy Data

2015 2016 2017 2018 2019
Population (million)42.642.442.242.041.9
GDP per capita (USD)2,0552,1752,6863,1203,678
GDP (USD bn)87.592.3113131154
Economic Growth (GDP, annual variation in %)-9.82.42.53.43.2
Consumption (annual variation in %)19.82.79.59.311.9
Investment (annual variation in %)-9.220.416.116.614.2
Industrial Production (annual variation in %)-12.34.01.13.0-0.5
Retail Sales (annual variation in %)-21.04.48.65.611.6
Unemployment Rate9.19.39.58.88.2
Fiscal Balance (% of GDP)-1.6-2.3-1.4-2.1-2.2
Public Debt (% of GDP)79.180.971.860.950.3
Stock Market (annual variation in %)-  -  -  -  -  
Inflation Rate (CPI, annual variation in %, eop)43.312.413.79.84.1
Inflation Rate (CPI, annual variation in %)48.514.914.511.07.9
Inflation (PPI, annual variation in %)-  -  -  -  -  
Policy Interest Rate (%)22.0014.0014.5018.0013.50
Stock Market (annual variation in %)-37.810.218.877.5-8.9
Exchange Rate (vs USD)24.0327.1028.1627.7123.70
Exchange Rate (vs USD, aop)21.9525.5626.6027.1925.81
Current Account (% of GDP)1.8-1.5-2.2-3.3-0.9
Current Account Balance (USD bn)1.6-1.3-2.4-4.4-1.3
Trade Balance (USD billion)-3.5-6.9-9.7-12.7-14.3
Exports (USD billion)35.433.639.743.346.1
Imports (USD billion)38.940.549.456.160.5
Exports (annual variation in %)-29.9-5.318.39.26.4
Imports (annual variation in %)-32.64.221.913.67.8
International Reserves (USD)13.315.518.820.825.3
External Debt (% of GDP)13512210187.779.2

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Ukraine Facts

Value Change Date
Bond Yield19.000.0 %Jul 27
Exchange Rate23.700.30 %Jan 01

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