“The negative impact of disrupted trade with Ukraine’s uncontrolled territories on the country’s GDP in 2017 was lower than expected – 0.9% compared to 1.3%,” the institution said in an inflation report published on Friday.
According to the National Bank, this trend may be related to a more rapid reorientation of metallurgical plants to new sources of raw materials amid the improved international conditions and the rise in domestic demand.
According to the estimates of the National Bank, GDP growth cooled down to 1.5% in the fourth quarter, compared to the same period last year, whereas in the third quarter it stood at 1.5%
“This was primarily due to a considerable fall in crop production, which was caused by poor harvest of late grain crops and industrial crops,” the institution explained.
The National Bank noted a rise in production within the processing industry, namely in machine-building, chemical and metallurgical production, which compensated almost in full for the further decline in output by the mining and power generation sectors. This is the result of the gap in the production and logistical links with the uncontrolled territories in Donbas in early 2017.
In late January the National Bank upgraded its forecast on Ukraine’s GDP growth in 2018 from 3.2% to 3.4%. At the same time, the forecast GDP growth for 2019 was downgraded from 3.5% to 2.9%.
Following a GDP contraction of 6.6% in 2014 and of 9.8% in 2015, Ukraine’s economy grew by 2.3% in 2016. According to the State Statistics Service, quarterly GDP growth cooled down as the year progressed. A 2.5% increase was recorded in the first quarter, which was followed by a 2.3% growth in the second and a 2.1% rise in the fourth quarter. The State Statistics Service has not published the data for the fourth quarter of 2017 and the year as a whole yet.