The motherland monument in Ukraine

Ukraine Government Consumption

Ukraine Government Consumption

Government Consumption in Ukraine

The Ukraine economy recorded average government consumption growth of 1.1% in the decade to 2022. In 2022, government consumption growth was 18.0%.

Ukraine Government Consumption Chart

Note: This chart displays Government Consumption (ann. var. %) for Ukraine from 2013 to 2022.
Source: State Statistics Service of Ukraine.

Ukraine Government Consumption Data

2018 2019 2020 2021 2022
Government Consumption (ann. var. %) -0.1 -13.6 -0.7 0.8 18.0

Economy records first growth since late 2021 in Q2 2023

According to a preliminary estimate, GDP grew 19.5% year on year in the second quarter of 2023, improving from the 10.5% decline seen in the first quarter. This result was stronger than expected and marked the first expansion since Q4 2021, following Russia’s invasion in February 2022. Meanwhile, on a sequential basis, GDP grew by 0.8% quarter on quarter in Q2, cooling from Q1’s 2.4% expansion. Absent a detailed breakdown, a press release from the Ministry of Economy stated that all subcomponents of domestic demand grew in Q2 on an annual basis, helped by government support for businesses, the restoration of production facilities and infrastructure and larger international aid inflows. Additionally, exports contributed to growth thanks to the Black Sea Grain Initiative and the establishment of new export routes, according to the Ministry. A strong base effect given it’s now been over a year since Russia’s invasion also supported Q2’s reading.

The economy should have expanded robustly in Q3, though should still have slowed markedly from Q2. The launch of the National Bank of Ukraine’s monetary loosening cycle in July should have fueled domestic demand. Strong fiscal stimulus and sustained foreign aid added further support. However, the end of the Grain Deal in July should have hit exports, and the collapse of the Kakhovka dam in early June likely further capped growth. The course of the counteroffensive, inflows of foreign funds and the fate of grain exports are key factors to monitor. Analysts at the EIU commented on risks to the outlook: “The risk of a contraction in 2023 is high—the destruction of critical energy infrastructure, alongside continuing heavy hostilities in the south and the east of the country, will act as a major drag on the economy. The loss of economic activity in the area of the Kakhovka Dam, the end of the Black Sea grain deal, and the start of military attacks on Ukrainian ports and ships in the Black Sea could all combine to push the economy into recession.”

Consensus Forecasts and Projections for the next ten years

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Ukrainian government consumption projections for the next ten years from a panel of 11 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable government consumption forecast available for Ukrainian government consumption.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Ukrainian government consumption projections.

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