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NBU Comment on Change in Real GDP in Q3 2018

21 December 2018

Press Release


In Q3 2018, Ukraine’s economy grew 2.8% yoy, decelerating from 3.8% yoy in Q2. This follows from detailed GDP data for Q3 2018 published by the State Statistics Service of Ukraine. Seasonally adjusted real GDP increased 0.4% qoq.


The actual growth of real GDP in Q3 2018 came in close to the NBU’s projections published in the October 2018 Inflation Report (3.1% yoy).


As expected, domestic demand, both consumer and investment, was the main driver of GDP growth in Q3 2018.


      The growth in final consumption expenditures of households accelerated to 9.7% yoy, underpinned by growing wages, pensions and labor migrant remittances. The relatively high and stable consumer confidence also fueled consumption growth.


Meanwhile, general government consumption fell 6.7% yoy, reflecting the moderate growth in budget expenditures.


      Investment continued to be one of the main drivers of economic growth.
Gross fixed capital formation (GFCF) kept increasing at a rapid 9.7% yoy, but the rate of increase was slightly down from previous periods, as companies’ financial performance and business expectations have been moderately worsening.


In Q3, growth in volumes of exports of goods and services returned negative (to 5.2% yoy). Among other things, this was attributed to a less benign external environment, lower harvest of early crops compared with last year, repairs at some of metallurgy companies, and transportation challenges amid heightened tensions in the Sea of Azov.


At the same time, robust growth in domestic demand caused imports of goods and services to accelerate (to 5.1% yoy). As a result, the negative contribution of net exports to the growth in real GDP increased to 4.8 pp.


By sectors, growth in gross value added slowed in both agriculture (to 3% yoy) and manufacturing (to 1% yoy). However, thanks to robust domestic demand, the performance of trade, transportation, services, and construction improved.


Considering the published Q3 data and information that has become available this quarter, the real GDP growth outturn for the whole 2018 is expected to come in close to the forecast published in the October 2018 Inflation Report (3.4%).


The revised macroeconomic forecast will be announced at the regular press briefing on monetary policy issues on 31 January 2019 and published in the Inflation Report on 7 February 2019.



Last modification   21.12.2018