Ukraine: Growth eases but remains strong in Q3
December 19, 2019
GDP growth moderated to 4.1% year-on-year in the third quarter, according to a second estimate by Ukraine’s Statistical Institute (previously reported: +4.2% year-on-year). The result was down from the second quarter’s over two-year high of 4.6% but still marked a healthy reading for the economy nonetheless.
The slowdown in the third quarter was largely driven by private consumption growth easing to 8.4% year-on-year, from 11.8% in the previous quarter, which had marked the fastest acceleration since Q4 2017. Conversely, government expenditure rebounded by 1.1% in Q3 (Q2: -6.4% yoy), while fixed investment growth jumped to 13.9% from 7.9% in Q2, amid upbeat construction activity and cheaper financing conditions.
On the external front, exports growth soared to a near nine-year high in the third quarter (Q3: +13.5% yoy; Q2: +4.4% yoy), on the back of upbeat shipments of agricultural goods. Meanwhile, import growth eased to 6.2% from 9.1% a quarter prior amid a softer consumption and a weaker currency. As a result, the external sector contributed 1.2 percentage points to the overall growth, marking the first positive contribution in three-and-a-half years (Q2: minus 2.7 percentage points).
Author: Nicolás J. Aguilar, Economist