Ukraine's economy ministry puts GDP contraction at 35% in Sept, 30% in 9M

MOSCOW. Oct 10 (Interfax) - Ukraine's GDP contracted by about 35% in September, like in August, the country's Economy Ministry reported.

In the first three quarters of 2022 overall, GDP shrank by an estimated 30%, the ministry said.

The estimate was made using indirect methods of calculation and modelling based on the behavioral indicators of economic agents, the ministry said.

Positive economic factors include an upturn in freight shipments thanks to the growth of exports of agricultural products by sea, as well as growth of freight shipments by rail. Thanks to the implementation of the "grain initiative," 5.5 million tonnes of agricultural products were shipped though the Big Odesa port in August-September, with the amount of exported product doubling in September compared to August and the number of vessels leaving ports almost tripling.

As a result, Ukraine's exports grew more than 23% by value in September compared to the previous month.

The latest data show that Ukrainian Railways Ukrzaliznytsia carried 11.7 million tonnes of freight in September, 8.4% more than in August.

The state budget's capital expenditures rose 33.2% in September compared to the previous month, the ministry said.

It also said that fuel prices stabilized in September thanks to the establishment of supply chains and diversification of suppliers, which generally balanced the domestic market and helped ease inflationary pressure on the economy.

There was also an improvement in businesses' expectations for the prospects of their economic activities, although they still remain pessimistic, the ministry said.

Negative factors affecting the economy included an extended period of rainy weather in some regions, which slowed the grain harvest, the ministry said.

In addition, the unstable operation and periodic disconnection of the Zaporozhye NPP from Ukraine's energy system lead to the redistribution of the workload among other power plants, which put significant pressure on the whole energy system, the ministry said.

The State Statistics Service estimated that Ukraine's GDP contracted by 37.2% in the second quarter after shrinking by 15.1% in the first quarter of 2022. The government expects GDP to fall 33.2% this year and grow by 4.6% in 2023, while the National Bank forecasts a decline of 33.4% and growth of 5.5%, respectively.

Ukraine's economy grew by 3.4% in 2021 after contracting by 3.8% in 2020.