Economy ministry projects decline in GDP in Q1 2021

Ukraine's Ministry for Economic Development, Trade and Agriculture says Ukraine's growth domestic product (GDP) may drop by 3% in the first quarter (Q1) of 2021.

That is according to an economic activity review for January-November 2020 published on the ministry's website.

Read alsoWorld Bank expects Ukrainian economy to grow by 3% in 2021"Before taking the decision on 'weekend quarantine' in November 2020 and the introduction of another lockdown in January 2021, the Economy Ministry projected a slight increase in GDP in the first quarter of 2021. Now, given the decrease in the safety factor of most economic activities, especially services, and the depletion of the economy by constant fluctuations and changes in operating conditions during 2020, it is obvious that in the first quarter of 2021, the fall in GDP may reach 3%," the ministry said in the report published on its website on January 11.

However, the adaptability and flexibility of certain types of economic activities enhanced by the experience gained during the peak of the pandemic in March-April 2020 under severe quarantine curbs, as well as the launch of vaccination worldwide and the government measures to support businesses and the population, may minimize this drop in the domestic economy.

The economy may enjoy positive dynamics starting from the second quarter (Q2) and until the end of 2021 if the morbidity situation does not worsen and strict restrictions are not introduced.

Based on the results of 11 months of 2020, the ministry estimated the GDP decline at 4.7%, which was generally in line with the projected trend.

Forecast

The Ministry for Economic Development, Trade and Agriculture forecasts a 4.6% growth in Ukraine's gross domestic product in 2021.

Ukraine's GDP

• On December 18, 2020, Prime Minister Denys Shmyhal said the domestic economy might decline by no more than 5% of GDP in 2020.
• The decline in Ukraine's GDP in 10 months of 2020 slowed to 5.2%, from 5.5% reported in January-September 2020.
• As of December 29, 2020, the Ministry for Economic Development, Trade and Agriculture maintained its basic macroeconomic forecast, which assumed a 4.8% decline in Ukraine's gross domestic product in 2020.