Bloomberg News

Ukraine Economic Growth Accelerated to 6.6% in Last Quarter

October 31, 2011

(Updates with seasonally adjusted data in third paragraph, analyst comment in fifth, market reaction in sixth.)

Oct. 31 (Bloomberg) -- Ukraine’s economy grew at the fastest pace in more than three years in the third quarter, helped by a good harvest and strong domestic consumption.

Gross domestic product advanced 6.6 percent in the three- month period ending in September from the same period a year ago, the quickest since the first quarter of 2008, the state statistics committee said today in a statement on its website. The result exceeded a median estimate of 5.9 percent by eight economists in a Bloomberg survey.

Growth accelerated a seasonally adjusted 2.2 percent from the previous three-month period, the statistics office said in the capital Kiev, without providing any additional data. GDP rose 3.8 percent in the second quarter and 5.3 percent in the first three months.

The economy is picking up after an almost 15 percent decline in 2009 when the global slump cut demand for the country’s exports of steel and chemicals. The east European nation forecasts a 35 percent increase in the grain harvest 35 percent to 53 million tons in 2011 because of favorable weather. Ukraine’s retail sales surged 15.2 percent in the first nine months of the year, according to the statistics data.

“Ukraine’s GDP advanced faster than we expected in the third quarter, implying full-year growth may reach 5 percent compared with our forecast of 4.3 percent,” said Olena Bilan, chief economist at Kiev-based Dragon Capital investment bank, in e-mailed comments. “We see economic growth slowing to 3.5 percent in the fourth quarter as industrial production growth will probably weaken sharply because demand for Ukraine’s exports is falling on the world’s markets.”

Ukraine’s national currency, the hryvnia, strengthened to 7.9966 per dollar as of 11:55 a.m. in Kiev from 8.0025 on Oct. 28, Bloomberg data shows.

--With assistance from Kateryna Choursina and Zoya Shilova in Moscow. Editors: Douglas Lytle, Alan Crosby

To contact the reporter on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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