Ukraine: Economy contracts at milder pace in Q3 as Covid-19 restrictions are loosened
November 16, 2020
A preliminary release revealed that GDP contracted 3.5% year-on-year in Q3, beating market expectations and softening from Q2’s 11.4% plunge, which had marked the sharpest downturn in five years. Although a comprehensive release is not yet available, the milder decline likely reflected a broad-based improvement in activity as Covid-19 containment measures were gradually eased.
On a seasonally-adjusted quarter-on-quarter basis, output surged 8.5% in Q3, rebounding from the 9.9% collapse logged in the prior quarter.
Assessing the prospects for the economy ahead, Andrew Matheny and Tadas Gedminas, analysts at Goldman Sachs, highlighted:
“Looking further ahead, we think that Q4 and Q1 are likely to be challenging and growth is likely to slow sharply, given the risks of economic restrictions returning and considering the slowdown that is taking place in Europe. […] Notwithstanding near-term challenges, we maintain our expectation for a sharp rebound from 2021Q2 onward, as a broader reopening of the economy takes place in Ukraine and elsewhere.”
Author: Javier Colato, Economist