Ukraine sees rise in GDP

Ukraine's real GDP rose 8.5% year-over-year in May, and 4 % year-over-year from January through May, the Ukrainian Statistics Committee has reported. Ukrainian normal GDP in May alone amounted to about UAH 37.876 billion, while it was UAH 166.587 billion from January through May. The committee said the growth in GDP can be attributed to an increase in the gross added value of construction of 8.2%, transportation 7.3%, trade 6.7%, production and distribution of electricity, gas and water 5.6%, agricultural, hunting and forestry industries 4.8% and extraction industry 4.2%.

The European Bank for Reconstruction and Development (EBRD) recently revised upwards its forecast of Ukrainian GDPgrowth in 2006, from 1.2% to 2%, with due regard to the development of the Ukrainian economy from January to March 2006. Updating its forecast, the EBRD economists used data from the first quarter of the current year. The forecast is lowest-case scenario and the EBRD hopes that the results will be higher, according to Kamen Zahariev, Chamber Board member and EBRD Country Director for Ukraine. Among the encouraging factors and the rising trend of industrial production, positive trends in trade, as well as inflation being kept under control, according to the EBRD Country Director. In addition, Ukraine's joining the World Trade Organization may foster economic growth in the medium-term, he said.   

The chief  aide to the National Bank of Ukraine's governor, Valeriy Lytvytsky, said that the rise in Ukraine's economy in May could translate to GDP growth of 4-4.5% in 2006. At the same time, according to the expert, the unclear situation with natural gas prices for the second half of 2006, coupled with the unsatisfactory state of privatization could hamper Ukraine's economic development.

Experts from the Ukrainian Economics Ministry forecast that Ukraine's GDP could grow 2.6% in 2006, according to consensus forecast of macroeconomic indicators for 2006 - 2007 prepared in the second quarter of 2006. Estimates for Ukrainian GDP in 2006 range from 1.5% to 3.5%, according to the forecast. The analysts also said Ukrainian inflation would total 11.5% in 2006, compared to an estimate of 12.6% in March. They predict inflation will drop to 10.1% in 2007.

Commerce

July / August 2006

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