Ukrainian Economy Ministry estimates GDP growth in Jan 2024 at 3.5%
MOSCOW. Feb 14 (Interfax) - Ukraine's gross domestic product (GDP) grew 3.5% (±1%) due to the expanding logistics capabilities and growing investment demand, Ukrainian media said, citing a preliminary assessment released by the Economy Ministry on Tuesday.
"The key factors supporting the positive economic dynamics at the beginning of the year were the growing investment demand generated by the budget, as well as foreign markets' accessibility for domestic producers due to the expansion of logistics capabilities," Ukrainian Deputy Prime Minister and Economy Minister Yulia Sviridenko said.
Specifically, the operation of the Ukrainian sea route, unilaterally opened by Kiev, allowed Ukraine to achieve record exports since the start of the crisis and to continue to increase economic activity, primarily by agricultural and metallurgical producers, metal ore mining companies and railway transport, Sviridenko said.
"In addition, lifting the blockade of the Ukrainian-Polish border by Polish carriers in the middle of the month had a positive impact on both exporters and manufacturers who are heavily dependent on imported raw materials," she said.
According to the ministry's preliminary data, the main sectors of Ukraine economy showed positive dynamics in January 2024. In particular, the transport sector was buoyed by a rise in domestic railway services and cargo handling at seaports. Economic activity continued to recover thanks to export-focused enterprises, namely those operating in the metals sector, metal ore mining and agricultural processing, as well as the energy sector. Not only did it contribute to positive tendencies in industry, but also helped form demand for joint products, the ministry said.
The construction sector has also been growing in the presence of the investment demand amid continuous budget funding for the restoration of damaged critical infrastructure, Sviridenko said. January 2024 also saw positive recovery tendencies in agriculture and domestic trade.
As reported, the National Bank of Ukraine (NBU) in January improved its estimate of real GDP growth in 2023 to 5.7%, kept its GDP growth forecast for 2024 at 3.6%, but lowered it from 6% to 5.8% for 2025. According to the NBU, GDP growth in the fourth quarter of 2023 slowed to 6.5% from 9.3% in the third quarter, but is expected to reach 7.1% in the first quarter of 2024, then dropping to 4.8% in the second quarter.
As the draft budget was debated in the second reading in early November 2023, the government raised its GDP growth estimate for 2023 from 2.8% to 5%, but lowered it from 5% to 4.6% for 2024.