In June, Ukraine’s GDP grew by 1.1% compared to June last year. As a result, in the first half of the year, GDP growth was estimated at 4.1% compared to the same period last year. These data were released by the Ministry of Economy.
The main factor behind the slowdown in economic growth was the power cuts caused by electricity shortages. However, despite the negative factors, the economic recovery continues.
“In June, the economy operated under difficult conditions of power outages, which weakened economic activity of both businesses and consumers. However, due to the high level of adaptability to difficult conditions and experience in responding to such challenges, the Ukrainian economy continued to grow. Among the factors that contributed to this were the high rate of exports of mining and metals products and the early start of the winter crop harvest. The stable operation of the Ukrainian sea corridor and the ability of certain enterprises to ensure stable access to electricity through direct imports are also positive factors that influenced economic growth,” said Yuliia Svyrydenko, First Deputy Prime Minister and Minister of Economy of Ukraine.
According to her, the economic growth rate of 4.1% in the first half of 2024 is currently in line with the updated government forecast, under which real GDP growth is expected to reach 3.5% in 2024.
At the same time, the analysis shows that the shortage of qualified personnel is negatively affecting business expectations.
In general, according to Yuliia Svyrydenko, positive dynamics in domestic trade continued in June. The construction sector also grew, with the main drivers of growth being budgetary funding for the restoration of damaged critical infrastructure, capital reconstruction, and road repairs in emergency areas. There was also significant growth in agriculture due to an earlier start to the harvest driven by weather conditions, which allowed the country to cultivate more land and harvest more crops. In livestock, the positive dynamics continued due to stable domestic demand and government support for producers. At the same time, the increase in production costs due to the use of backup power is having a negative impact on poultry producers, particularly egg producers.
Currently, high security risks and the consequences of the destruction of the energy infrastructure remain key unresolved issues. Restoring the energy sector will take time and resources, which is expected to slow the pace of recovery in production activity. Logistical problems and the difficult situation on the labour market also remain negative factors for the economy. (Government portal)