We slightly revised the estimate of real GDP contraction to 13.4% in 2009 to incorporate the newest statistical information.
According to the base scenario, the real final consumption, fixed capital accumulation, as well as external demand for Ukrainian products are very weak in 2009.
Economic development in Ukraine and in the world was in line with assumptions and expectations embedded in the previous issue of the IER forecast. Therefore, we preserved the estimate of real GDP contraction at 12.0% for 2009, though somewhat changed the development of its components.
Recent economic developments in Ukraine and in the world were in line with the assumptions and expectations embedded in the previous issue of the IER forecast.
The estimate of real GDP contraction for 2009 was significantly downgraded to 12.0% due to increased uncertainty of economic agents concerning future economic development in both Ukraine and the world, and raised warns of protectionism measures introduced by Ukraine’s trade partners.
The real GDP is estimated to decline by 7.2% in 2009 with major sectors of economy reducing their production due to deteriorated domestic and external demand.
Ukraine’s economy entered in a recession in the fourth quarter of 2008 as the world financial crisis uncovered and aggravated weaknesses of the national economy.
Between January and October real GDP grew by 5.8% yoy, decelerating by 1.1 percentage points (p.p.) comparing to the first nine months of the year.
MEMU SUPPLEMENT: "Global financial crisis: impact on Ukraine’s banking sector"