Ukraine’s GDP growth is estimated at 4.5% in Q1 – Ministry of Economy

The growth of Ukraine’s gross domestic product (GDP) in January-March 2024 amounted to 4.5% y/y (+/-1%). This is stated in the estimate of the Ministry of Economy of Ukraine.

In March, growth accelerated to 4.6% y/y (+/-1%) from 3.9% (+/-1%) in February and 3.5% (+/-1%) in January 2024.

In March, the trend of recovery growth continued, supported by the stable operation of the Ukrainian sea corridor (which stimulated the activities of rail transport, steel industry and iron ore mining), the increase in production capacity in the mining industry, the intensification of fertilizer production, and the increase in demand for construction services, which occurred against the backdrop of improved business sentiment and revived consumer activity.

Last month, almost all aggregate economic activities made a positive contribution to the total GDP.

«Thus, exports of agricultural products and iron and steel were provided by the Ukrainian sea corridor; investment demand generated by the budget, as well as the increase in production capacity in the mining industry, formed a positive contribution of manufacturing activities and related economic activities of the service sector,» the agency noted.

At the same time, in the third decade of March 2024, the Russian Federation carried out the largest-scale attacks on Ukraine’s energy system since 2022, which led to its serious destruction. As noted by the Ministry of Economy, this has to some extent slowed down the resumption of growth in some activities and will have negative consequences for further electricity production and ensuring stable power supply during peak consumption periods.

According to preliminary data from the State Statistics Service, Ukraine’s real GDP grew by 5.3% in 2023 compared to the previous year, when the decline was 28.8% y/y.