Ukraine's real GDP growth slows to 4.1% in April 2024 - economic research institute

MOSCOW. May 21 (Interfax) - Ukraine's real gross domestic product (GDP) growth in April 2024 slowed to 4.1% year-on-year due to problems in the Ukrainian energy system, down from 4.8% in March, 5% in February, and 5.2% in January, Ukrainian media quoted a monthly economic monitoring report by the Institute for Economic Research and Policy Consulting (IER) as saying.

"Damage to a significant part of shunting generating capacity has caused power outages for businesses and population. Restrictions on power supply will result in further slowing GDP growth rates," IER leading research fellow Alexandra Betly was quoted as saying in the report.

She mentioned among the positive news the growth of exports and imports due to better logistics both via the Ukrainian sea corridor unilaterally declared by Kiev and by road transport, although rail traffic in April dropped 5% month-on-month and 29% year-on-year to 15.2 million tonnes.

The IER said that real gross value added (GVA) growth in the processing industry stood at 10% in April, while that of the extractive industry amounted to around 3%. Better logistics facilitated efforts to step up the performance of metallurgy and iron ore mining, it said.

The institute estimated that the GVA growth rate in the construction industry was high, which is partly due to building fortifications, while the trade growth rate slowed to 3% on the back of a higher statistical base.

The IER also noted that both the tax and customs services outperformed revenue estimates in April, with the National Bank of Ukraine (NBU) transferring twice as much revenue to the budget.

As reported, after Ukraine's GDP rose 5.3% in 2023, the National Bank expects it to slow to 3% this year, while the government expects it to slow to 4.6%. The Economy Ministry said that GDP growth reached 4.5% between January and March this year, while the NBU estimated it at 3.1%.