The growth of Ukraine’s gross domestic product (GDP) in the second quarter of 2018 slightly accelerated, to 3.2% from 3.1% in the first quarter, the National Bank of Ukraine said in the July inflation report. “In Q2, 2018, Ukraine’s economy kept growing. The high business expectations of companies were evidence of sustained growth in investment activity. The further increase in personal income fueled consumer demand. Overall, real GDP growth in Q2, 2018 is estimated at 3.2% year-on-year,” reads a report on the central bank’s website.
The steady rise in consumer demand was propelled by stronger household income (wages, pensions, remittances). The latter supported the high growth rates of retail turnover, the NBU said.
“As in Q1, the disruption of ties with the non-controlled territories last year had an impact on the pace of economic growth. As a result, gross value added in the metallurgy, mining industry, and energy sector kept growing despite being held back somewhat by repairs at several large enterprises of the mining industry and metallurgy,” the report says.
As reported, a week earlier the National Bank confirmed the forecast for Ukraine’s GDP growth in 2018 and 2020 at 3.4% and 2.9% respectively, but worsened expectations for 2019 from 2.9% to 2.5%.
In the inflation report, the NBU also confirmed the inflation forecast for the current year at 8.9%, but improved the forecast for underlying inflation to 7.1%.
The growth of Ukraine’s economy in 2017 accelerated to 2.5% from 2.3% a year earlier with the increase in inflation to 13.7% from 12.4%.