Economy ministry estimates GDP decline, warns of consequences of epidemic

The gross domestic product of Ukraine in January-February 2020 decreased by 0.2%, while in January the decline stood at 0.5%, according to the review of economic performance compiled by the Department of Strategic Planning and Macroeconomic Forecasting at the Ministry for Development of Economy, Trade and Agriculture.

"Following February, the economic decline slowed down. Thus, the reduction in the industrial production index amounted to 1.8% against 2.6% in January. This was due to a better situation in the main types of economic activity, including due to an additional day in February 2020. In particular, there was an increase in domestic trade and agricultural output, a slowdown in industry, and transport. As a result, the reduction in GDP in January-February was estimated by the Ministry of Economy at 0.2%," the review said.

The ministry noted that in February, only some subspecies of certain industries started being affected by the spread of the coronavirus across the world (in particular, metallurgy and air transportation).

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The key factors that affected economic activity, the ministry says, include a decrease in demand for energy resources amid warm weather conditions, poor global market conditions, and low demand for natural gas in the EU.

The authors of the review also indicated that the coronavirus pandemic, which provoked changes in the development trends in world economy, as well as the introduction of quarantine in Ukraine, would have serious consequences for the manufacturing sector and the economy as a whole, especially in the first half of 2020.

As UNIAN reported earlier, the growth of real GDP of Ukraine in the fourth quarter of 2019 year-on-year amounted to 1.5%, slowing down from 4.1% in the same expression a quarter earlier. In January, the fall in GDP was 0.5%.