Ukraine’s GDP grew by 10.5% y/y in October

The Ministry of Economy estimates Ukraine’s GDP growth in October 2023 at 10.5% [±2%] compared to October 2022. For January-October, economic growth is estimated at 5.5% y/y. This is stated in the press release of the Ministry of Economy.

«In October, GDP growth accelerated to 10.5%. The positive factors that contributed to the economic growth included high agricultural yields and favorable weather, which ensured a high rate of harvesting. The stable situation in the energy sector and the operation of a temporary corridor for civilian ship traffic to the ports of Greater Odesa also contributed to the positive outlook. Significant destruction of infrastructure and fixed assets, persistence of significant security risks, export logistics constraints, slow labor market recovery, lack of sufficient equity capital, and affordable credit remain constraints to economic growth. Overall, however, positive factors outweighed the balance of impact on GDP in October», commented the First Deputy Prime Minister of Ukraine – Minister of Economy Julia Svyridenko.

The service sector made the largest positive contribution to GDP in October. The second place goes to the manufacturing sector, which, although it suffered significant damage and destruction during the war, is showing a steady recovery.

«In the industry, there is a gradual recovery of production rates in the conditions of an increase in the raw material base from the side of agricultural production, the need to replenish coal and gas reserves to pass the winter period, a stable situation in the energy sector and investment demand from the budget sphere,» she added.

The construction sector was positively affected by budget funding, which was used for emergency restoration of infrastructure damaged by the hostilities and major reconstruction in the previously liberated territories.

In September 2023, Ukraine’s GDP grew by 9.1% compared to the same month in 2022. In January-September 2023, the economy grew by 5.3% compared to the same period in 2022.

As GMK Center reported earlier, Ministry of Economy raised the forecast of GDP growth in the current year to 4%. This is a more optimistic forecast than that of the National Bank, which expects growth at the level of 2.9%. In the medium term, we can expect economic growth of 3.5% in 2024 and 6.8% in 2025.