Ministry of Economy estimated Ukraine's GDP growth in Jan 2024 at 3.5%
Ukraine's gross domestic product in January 2024 grew by 3.5% [±1%] compared to January last year due to expanded logistics capabilities and increased investment demand, the Ministry of Economy announced this preliminary estimate on Tuesday.
"The key factors supporting positive economic dynamics at the beginning of the year were the growing investment demand generated by the budget, as well as the accessibility of foreign markets for domestic producers thanks to the expansion of logistics capabilities," First Deputy Prime Minister, Minister of Economy Yulia Svyrydenko is quoted in the press release.
According to her, in particular, the work of the Ukrainian maritime corridor under the control of the Ukrainian Armed Forces made it possible to achieve record export volumes since the beginning of Russia's large-scale invasion and continue to increase economic activity, primarily for producers of agricultural and metallurgical products, metal ore mining enterprises and railway transport.
"Also, the lifting of the blockade by Polish truckers on the Polish-Ukrainian border from the middle of the month had a positive impact on both the activities of exporters and the activities of manufacturers who are significantly dependent on imported raw materials," Svyrydenko added.
According to preliminary estimates by the Ministry of Economy, the main sectors of the economy showed positive dynamics in January. In particular, the transport industry was supported by the expansion of domestic rail transport and cargo handling at seaports. The continued recovery of economic activity due to export-oriented industries, namely metallurgy, mining of metal ores and agro-processing, as well as energy, not only led to positive trends in the industry, but also created demand for products of related activities, the ministry believes.
In his opinion, due to investment demand amid continued budget funding for the restoration of damaged critical infrastructure, the construction industry is also growing. Also in January, upward recovery trends were observed in agriculture and domestic trade.
"The key unresolved problems remain the ongoing destruction of production capacity, the difficult situation in the labor market due to high migration, as well as the lack of available credit resources," Svyrydenko said.
As reported, the NBU in January estimated Ukraine's GDP growth in 2023 at 5.7% and maintained its forecast for its growth in 2024 by 3.6%, slightly worsening it for 2025 – from 6.0% to 5.8%. According to the National Bank, in the fourth quarter of 2023, economic growth slowed to 6.5% from 9.3% in the third quarter, but in the first quarter of 2024 it will accelerate to 7.1%, followed by a slowdown to 4.8% in the second quarter.
When approving the draft state budget for the second reading in early November, the government improved its estimate of GDP growth this year from 2.8% to 5%, but worsened it for 2024 from 5% to 4.6%.