The Ministry of economic development and trade of Ukraine (MEDT) expects in the first half of 2016 the recovery of economic activity in the country and gross domestic product (GDP) by 1% plus-minus 0.5 percentage points (PP) after its decline by 10% in 2015 and 6.8% in 2014.
«The recovery … will be due to the influence of statistical effects – low-base and economic – resumption of work of enterprises in the East of the country, growth in domestic demand because of the level of wages, reduce the deficit by reducing the load on the SST (single social contribution) on the PAYROLL (the wage Fund)», – stated in the message of the Ministry on Monday February 22, reports «Interfax-Ukraine».
Simultaneously the Ministry points to continuing risks of falling prices for key commodity markets, Ukrainian export and restrictions from the Russian Federation.
The Ministry notes that the figures of the fourth quarter of 2015 confirm the recovery of the Ukrainian economy: according to current estimates of the state statistics, the seasonally adjusted GDP grew by 1.5% compared with the previous quarter, while in the third quarter it increased by 0,5% compared with the second.
«The last time GDP grew for two consecutive quarters five years ago, namely in 2011, when there was a boom in world commodity markets, while domestic manufacturers now operate in the conditions of permanent military operations in the East of the country and a further fall in the prices of key commodity groups in domestic exports, which takes place for three consecutive years,» notes the economic Department.
It specifies that in relation to the same period of the previous year, a decline of the Ukrainian economy in the fourth quarter of 2015 slowed to 1.2% from 7.2% in the third quarter and 17.2% in the first quarter.
The Ministry adds that the positive dynamics of the GDP was supported by the improvement in dynamics in all economic activities in the real sector, and the most in construction (growth on 6,3%) and transport (growth by 4.9%), reflecting increased budget support and transit of natural gas.
Earlier, on February 16, Prime Minister of Ukraine Arseniy Yatsenyuk during a government report to the Parliament said that the growth of Ukraine’s economy in the 4th quarter of 2015 was 1.5%, however the forecasts for the economy this year and forecast economic growth will be adjusted taking into account external and internal factors.
Recall that the state budget of Ukraine for 2015 was originally built on the optimistic scenario of development of the situation providing for the decline in real GDP of 5.5% with inflation of 26.7%. However, the revision of the budget in the Parliament on 17 September was based on the forecast of decline of 8.9% with an inflation rate of 45.8%. Subsequently, the Ministry has lowered the forecast to fall to 10.4% and the national Bank – to 10.6%. Inflation by the end of last year was 43.3%.
Regarding 2016, the national Bank has already downgraded its GDP growth forecast to 1.1% from 2.4%, MEDT – 1% from 2%.
In February, the Ministry estimated a decline in gross domestic product in 2015 to 10% compared with 2014.
The Ministry of economic development forecasts GDP growth in the first half of 2016 to 1% 23.02.2016