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Ukraine's economy can still begin to grow in 2016.

Ukraine’s economy can still begin to grow in 2016.

Posted in News.

National Bank has confirmed the previous forecast of GDP growth in 2016 at a level of 1%. Due to the devaluation of the population and insolvency imports fell more exports, which hinders decline in real GDP.
  
National Bank of Ukraine (NBU) maintains its forecast of growth of real gross domestic product (GDP) of Ukraine in 2016 at a level of about 1%, according to the regulator’s website.

“The National Bank expects further recovery of economic growth in 2016 which would still be quite restrained – about 1%”, – the report says.

According to the NBU, will support the growth and further improvement in the expectations of the establishment of economic relations between the regions on the background of macro-stabilization and de-escalation of the military conflict in the east, as well as a low base of comparison.

This moderate growth the central bank explains complicated external conditions (slow global economic growth, low prices on world commodity markets, new trade and transit restrictions on the part of Russia), as well as strengthening of internal political instability.

According to the report, in the fourth quarter of 2015 GDP decline slowing faster than forecast NBU. In particular, according to updated data of the State Statistics, in the fourth quarter of 2015, real GDP grew by 1.4% compared with the previous quarter (net of seasonal factors) in the annualized decline in GDP in the fourth quarter slowed to 1.4% (according to preliminary estimates NBU -up to 1.2%).

NBU explains this significant growth in the construction sector and the improvement of the situation in the services sector.

“In particular there was a fracture of the downward trend of positive gross value of education, health, public administration and defense, information and telecommunications, professional, scientific and technical activities”, – the report says.

The decline in 2015 real GDP of 9.9% was also lower than previously forecasted NBU (10.5%), but the trends in the economy in 2015 were generally consistent with the expectations of the National Bank.

According to the report, in particular, a major constraint to the fall in real GDP in 2015 was net exports, whose contribution remained positive in the second quarter 2015. Despite the decline in exports during the year, the positive contribution of net exports due to a significant reduction in imports on the background of the devaluation of the hryvnia and contraction in domestic demand.

National Bank notes that the recovery of the investment began in the second half, but later than expected. The main factor of decline in real GDP was falling private consumption, despite its slowdown in the second half. At the same time, emphasizes the central bank, on the background of a significant reduction in 2014, the dynamics of stocks of material and technical resources in 2015 had a positive contribution to the change in real GDP.

As reported, in January, the National Bank downgraded Ukraine’s GDP growth forecast for 2016 to 1.1% from 2.4%, leaving unchanged the forecast inflation at 12%

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