Ukraine’s 2018 GDP growth reached a record level since 2011

Business in Ukraine -- Ukraine’s 2018 GDP growth reached a record level since 2011

In 2018, #Ukrainian #GDP growth reached its highest level since 2011, breaking above 3.3 percent. However, this #trend is expected to #ease a bit in 2019. The #IMF (International Monetary Fund) expects a growth rate of 2.7 percent.

Visit our website if you are interested in the #Ukrainian_economy or #doing_business in Ukraine.

Despite the war and crisis in the East, Ukraine showed good growth figures in 2018. According to the State Statistics Service of Ukraine, Ukrainian gross domestic product (GDP) grew by 3.3 percent, reaching a record high since 2011, compared to 2.5 percent in 2017, driven mainly by private consumption, investment, agricultural production, trade, and construction. Nonetheless, GDP growth fell below the International Monetary Fund (IMF) forecast of 3.5 percent.

Nominal GDP reached USD 131 billion in 2018, which is USD 19 billion more than in 2017. The acceleration of economic growth resulted from a 7.8 percent increase in agricultural production following a record grain harvest, while private consumption (8.9 percent) and investment (14.3 percent) were also among the major drivers.

Trade and construction together accounted for nearly 11 percent of GDP growth, while processing industry showed an increase of 0.6 percent. Moreover, a significant slowdown in import growth from 13 to 3.2 percent in 2017 also contributed to GDP growth.

GDP per capita in 2018 also rose to USD 3,098. Compared to other European countries, such as Poland, where GDP per capita is five times higher and reaches USD 15,444, or Hungary with its USD 14,237, such growth is still very modest.

However, growth might slow down in 2019. For example, the International Monetary Fund forecasts a Ukrainian GDP growth rate of around 2.7 percent for 2019, while the previous forecast for this year projected GDP to grow by 3.3 percent.

The National Bank of Ukraine also does not expect the country’s GDP to increase by more than 2.5 percent in 2019 and by 2.9 percent in 2020. However, Ukrainian Prime Minister Volodymyr Groysman is more optimistic about it and expects GDP to grow by more than 3 percent.

Important reforms are still outstanding. These include the fight against corruption, energy sector reforms, privatization and the creation of a market for agricultural land plots.

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