Real GDP growth in Ukraine slows to 3.6% in Nov - economic research institute

MOSCOW. Dec 21 (Interfax) - The growth of Ukraine's real GDP slowed down to 3.6% in November 2023 year-on-year from 6.4% in October and 11.1% in September primarily due to a decrease in real gross value added (GVA) of approximately 4% in agriculture and the transport sector, the Kiev-based Institute for Economic Research and Policy Consulting (IER) said.

"Both were harmed by the blockade of the border by Polish carriers," Ukrainian media quoted the IER as saying in its monthly economic monitoring report.

The decline in the agricultural sector was also due to the earlier start of the harvesting campaign this year, it said.

Ukraine's real GDP in November 2023 was more than 30% lower than in November of the pre-crisis year of 2021, it said.

Real GVA in the construction sector remains almost unchanged, but decreased compared to 2021 because of less funding for infrastructure projects, the IER said.

At the same time, real GVA growth in the energy sector accelerated for a number of reasons, including the effect of the statistical base, as there were problems with access to electricity in November 2022, and the last few days of November 2022 also saw a blackout, it said.

The processing industry's growth rate decelerated slightly, but still was more than 14% year-on-year, a tendency that reflects the economy's gradual recovery and last year's low base, the IER said. Trade also grew in November 2023, but the metals industry showed worse results due to the suspension of ferroalloy plants' operations, it said.

The commodity trade deficit dropped to $2.1 billion in November, whereas exports increased 10% to $3 billion due to an intensification of the Ukrainian maritime route's operations, but imports, three-quarters of which by value are transported by road, fell 9% to $5.1 billion because of the continuing border blockade by Polish haulers.

As reported, the Ukrainian Economy Ministry said on Wednesday GDP grew 4% in November 2023 year-on-year, and by 5.5% in January-November 2023.

The National Bank of Ukraine in late October raised its GDP growth forecast for 2023 from 2.9% to 4.9%, from 3.5% to 3.6% for 2024, but lowered it from 6.8% to 6% for 2025.

As it approved the draft budget ahead of its second reading in parliament in early November, the government improved its GDP growth estimate for 2023 from 2.8% to 5%, but lowered it from 5% to 4.6% for 2024.