Ukraine’s economy shrank 8 percent in the fourth quarter, the first contraction since 1999, as the global financial crisis took its toll on the former Soviet state, Bloomberg reported.
Growth was revised down in all three of the previous quarters, the statistics office added in a statement released today on its Web site. The economy expanded 6.4 percent in the third quarter, 6.2 percent in the second quarter, and 6.3 percent in the first quarter, it said.
A global recession is compounding problems in eastern European economies, which are being battered by a lack of credit, weakening currencies and plunging demand for their products. Ukraine was forced to turn to the International Monetary Fund with other emerging-market countries, including Hungary and Latvia, to boost its financial system in November.
The fourth-quarter decline was led by construction, which plummeted 32.7 percent, according to today’s data. The processing industry fell 22.6 percent in the fourth quarter.
Ukraine’s economy, which has expanded at an average annual pace of 7 percent since 2000, grew 2.1 percent in 2008, the slowest since 1999, compared with 7.9 percent in 2007, according to the statistics data. The nine-year expansion was helped by exports, strong domestic consumption and investments.
The economy has entered a recession, declining by 30 percent in the first two months of 2009 after as investment dries up and exports fell, President Viktor Yushchenko said on March 31. The Washington-based IMF said Feb. 27 it expects a 6 percent contraction of Ukraine’s economy this year, adding that it may lower the forecast.
The Kiev-based statistics office initially reported economic growth of 6.5 percent in the first and second quarters, and 6.9 percent in the third quarter.
