Ukrainian central bank hopes for GDP growth of more than 0.2% y/y in 2013.

By bne IntelliNews September 29, 2013

Valerii Lytvytskyi, the chief adviser to the chairman of the National Bank of Ukraine (NBU), is hoping that the GDP growth rate in 2013 will be more than 0.2% y/y. According to him, in Q3, the fall of the GDP could be 0.1-0.2pps smaller than in the previous quarters of 2013.

Among the factors indicating stabilization of the economic dynamics in H2, Lytvytskyi listed the slowdown of the decline in the construction and transport sectors and the significant positive trend in the agricultural and trading sectors. He expressed the hope that these trends will continue in the above-mentioned sectors until the end of this year.

In mid-September, the State Statistics Service has worsened the estimate of GDP decline in Q2 from 1.1% to 1.3% y/y. Adjusted for the seasonal factor, GDP shrank 0.5% q/q in Q2. Nominal GDP made UAH 351.896bn in Q2. In Q1, GDP declined by 1.1% y/y. Ukraine's GDP growth in 2012 slowed to 0.2% from 5.2% in 2011.

Standard & Poor's expects a GDP growth rate of 1% in Ukraine in 2013 under optimistic scenario. Under the pessimistic scenario, GDP growth in Ukraine in 2013 will be around 0.5%.

The EBRD forecasts GDP to decline by 0.5% y/y in 2013. The IMF forecasts zero GDP growth in Ukraine in 2013. Assuming unchanged politics, country’s GDP will remain unchanged compared to 2012-says the IMF. In 2014, the IMF forecasts GDP growth of 2.8%.

In early April, the World Bank has worsened Ukraine’s GDP growth forecast from 3.5% y/y to 1% y/y in 2013. The World Bank also lowered its forecast of Ukraine's GDP growth in 2014 from 4% to 3%. In 2015, Ukraine’s GDP is expected to grow by 4%.

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