20.12.2016, 17:56
NBU Comments on Real GDP Change in the Third Quarter of 2016
OREANDA-NEWS. Ukraine’s economy continued to expand at a moderate pace. The revised data suggest that in Q3 2013, real GDP growth accelerated to 2.0% y-o-y.
Real GDP growth outperformed the NBU estimates presented in the recently issued Inflation Report (1.6%). Although, the developments were in line with the forecast, some variables outperformed the NBU’s forecast.
As anticipated, investments remained the key driver of GDP growth, with gross fixed capital formation growth accelerating to 25% y-o-y, outperforming the NBU’s expectations. Public sector consumption also resumed growth. However, household consumption growth accelerated slightly (to 4.9% y-o-y). In addition, changes in inventories made a higher positive contribution to real GDP dynamics (to 4.6 pp), reflecting both stronger performance of crop production industry and higher imports, including due to the accumulation of gas reserves in underground storages ahead of the heating season.
In Q3 2016, higher-than expected growth in imports (13.9% y-o-y) was driven by the recovery of domestic demand, primarily investment demand. In contrast, exports performance was weaker than expected, with the pace of decline in exports slowing to 5.5% y-o-y. As a result, in Q3 2016, a negative contribution of net exports in GDP change increased significantly (up to 9.4 percentage points).
GVA change by groups of economic sectors for frequent data updates are available was broadly in line with expectations. As expected, output data pointed to weaker performance in other sectors, primarily the industrial sector and trade turnover, except agriculture and construction, which remained a bright spot.
Across service sectors, the pace of decline in GVA of insurance and financial activity slowed sharply (6.3% y-o-y down from 24.6% y-o- in Q2 2016). In annual terms, GVA dynamics have worsened across other service sectors. In particular, the GVA decline in the education and health care sectors accelerated.
According to NBU estimates, agriculture is expected to be the main driver of economic growth, supported primarily by higher harvest late-maturing crops as compared with the previous year. In addition, in mid-Q4 2016, the effect of factors that weighed down on industrial sector activity faded away. In particular, the reconstruction of the railroad junction was completed in the east of the country, with external price environment for Ukrainian exporters improving in global in global iron ore markets finished metal goods markets. Weaker performance across other sectors was offset by a pick-up in industrial activity.
Q3 revised GDP data and available data for key economic sectors for October-November suggest that in 2016 economic growth is set to slightly outperform the NBU’s GDP growth projections.
Real GDP growth outperformed the NBU estimates presented in the recently issued Inflation Report (1.6%). Although, the developments were in line with the forecast, some variables outperformed the NBU’s forecast.
As anticipated, investments remained the key driver of GDP growth, with gross fixed capital formation growth accelerating to 25% y-o-y, outperforming the NBU’s expectations. Public sector consumption also resumed growth. However, household consumption growth accelerated slightly (to 4.9% y-o-y). In addition, changes in inventories made a higher positive contribution to real GDP dynamics (to 4.6 pp), reflecting both stronger performance of crop production industry and higher imports, including due to the accumulation of gas reserves in underground storages ahead of the heating season.
In Q3 2016, higher-than expected growth in imports (13.9% y-o-y) was driven by the recovery of domestic demand, primarily investment demand. In contrast, exports performance was weaker than expected, with the pace of decline in exports slowing to 5.5% y-o-y. As a result, in Q3 2016, a negative contribution of net exports in GDP change increased significantly (up to 9.4 percentage points).
GVA change by groups of economic sectors for frequent data updates are available was broadly in line with expectations. As expected, output data pointed to weaker performance in other sectors, primarily the industrial sector and trade turnover, except agriculture and construction, which remained a bright spot.
Across service sectors, the pace of decline in GVA of insurance and financial activity slowed sharply (6.3% y-o-y down from 24.6% y-o- in Q2 2016). In annual terms, GVA dynamics have worsened across other service sectors. In particular, the GVA decline in the education and health care sectors accelerated.
According to NBU estimates, agriculture is expected to be the main driver of economic growth, supported primarily by higher harvest late-maturing crops as compared with the previous year. In addition, in mid-Q4 2016, the effect of factors that weighed down on industrial sector activity faded away. In particular, the reconstruction of the railroad junction was completed in the east of the country, with external price environment for Ukrainian exporters improving in global in global iron ore markets finished metal goods markets. Weaker performance across other sectors was offset by a pick-up in industrial activity.
Q3 revised GDP data and available data for key economic sectors for October-November suggest that in 2016 economic growth is set to slightly outperform the NBU’s GDP growth projections.
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