Ukraine GDP


Ukraine: Growth moderates in the third quarter

December 31, 2010

In the third quarter, GDP increased 3.4% over the same quarter the previous year. The figure was a notch below the 3.5% preliminary estimate released by the Statistics Committee on 15 November and represented a deceleration compared to the second quarter's 5.9% expansion. While the result benefited from a low base of comparison, as the economy had plunged 16.0% in the third quarter of 2009, the economy could not maintain the second quarter's momentum. The slowdown was mostly driven by a weaker contribution from the external sector. Exports decelerated markedly, expanding 6.0% (Q2: +14.9% year-on-year), while imports slowed from a 24.9% expansion in the second quarter to 19.9% in the third. As a result, the net contribution from the external sector to overall growth deteriorated from minus 3.6 percentage points in the previous quarter to minus 5.1 percentage points. On the domestic front, growth in total consumption picked up from 3.4% in the second quarter to 7.0% in the third. The expansion reflected stronger growth in both private consumption (Q2: +5.1% yoy; Q3: +7.5% yoy) and government spending (Q2: -0.7% yoy; Q3: +4.2% yoy). Moreover, fixed investment swung from a 5.7% contraction in the second quarter to a 3.6% expansion in the third. At the sector level, manufacturing led the deceleration, moderating the pace of expansion to 12.8% (Q2: 14.7% yoy), while agriculture contracted 3.3% (Q2: +3.4% yoy). In contrast, the services sector continued to recover, fuelled primarily by stronger growth in wholesale, retail trade and repair services, which increased 10.8% (Q2: +4.2% yoy). A quarter-on-quarter comparison corroborates the deceleration in economic activity as GDP expanded 0.1% over the previous quarter in seasonally adjusted terms (Q2: +3.9% quarter-on-quarter). The government expects the economy to expand 4.5% this year


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