Ukraine’s GDP grew 4.2% y/y in 3Q, above expectations

UKRAINE - In Brief 15 Nov 2019 by Dmytro Boyarchuk
In 3Q 2019 Ukraine’s GDP grew 4.2% y/y slightly slowing from +4.6% y/y in 2Q. Still the result appeared to be much above expectations. We projected +3.1% for the third quarter, the NBU projected +3.5%. Poor industry performance (-1.0% y/y in 3Q) was the reason for modest estimate. However, it looks like strong agro-production (+5.2% y/y) on the supply side and booming consumption (retail grew +9.3% y/y in 3Q) on the demand side keep the economy robust. For 2019 grain harvest is expected to reach 74 mmt or +5.6% y/y, above expectations. In light of 3Q results, GDP will grow at least 3.6% y/y in 2019. Prospects 2020 look good but will depend on gas transit deal with Gasprom and reforms progress. For base-case we project +2.6% y/y for 2020 but we are modest on grain harvest 2020 and we expect loss of proceeds from gas transit services. Things might turn out better than we assume.

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