Ukraine: GDP rebounds on low base effect after five quarters of declining output
A preliminary release revealed that GDP rose 5.4% year-on-year in the second quarter of 2021, contrasting Q1’s 2.0% contraction. Q2’s result marked the first rebound after five consecutive quarters of declining output and the fastest expansion since Q3 2011. That said, the reading was propped up by a low base effect, as Q2 2020 saw one of the steepest contractions on record, and surprised market analysts to the downside. Although a comprehensive release is not yet available, the rebound was largely due to healthy activity in both the industrial and retail sectors.
On a seasonally-adjusted quarter-on-quarter basis, output fell 0.8% in Q2, moderating somewhat from the 1.1% drop logged in the previous quarter.
Commenting on the second quarter’s figure, Andrew Matheny and Tadas Gedminas, analysts at Goldman Sachs, remarked:
“While quarterly GDP data has been quite volatile in Ukraine throughout the pandemic period, given the downside surprise, it is also an incrementally dovish data point for the NBU policy outlook, and we think it supports our baseline view for no further tightening this year.”