Ukraine: GDP grows at over 10-year high in Q4, despite tensions with Russia
A preliminary release revealed that GDP rose 5.9% year-on-year in the fourth quarter of 2021, gaining steam from the third quarter’s 2.6% growth and logging the highest figure in over 10 years in the process.
Q4’s upturn, which came despite mounting tensions at the border with Russia, surprised market analysts on the upside. Although a comprehensive release is not yet available, the reading likely came amid robust performances from the agriculture and retail sectors.
On a seasonally-adjusted quarter-on-quarter basis, output rose 1.8% in Q4, rebounding from the 0.7% drop logged in the previous quarter. For 2021 as a whole, GDP grew 3.2% yoy, contrasting the 4.0% contraction recorded in 2020.
Commenting on the third quarter’s figure, Andrew Matheny and Tadas Gedminas, economists at Goldman Sachs, remarked:
“Going forward, we think that the positive contributions from the agricultural sector could carry over into 2022, and we are seeing signs of new drivers of growth emerging, specifically the rising importance of IT service exports. […] While ongoing geopolitical tensions present near-term risk to activity, if these begin to ease and eventually fade, we would expect Ukraine to continue with its post-pandemic recovery. Our baseline forecast is for GDP growth to reach +3.3% in 2022.”