Economy Ministry forecasts 1% rise in Ukraine's GDP in H1, 2016

(Text after paragraph three has been added in news item issued on Feb 22) The Ministry of Economic Development and Trade of Ukraine expects the revival of economic activity and the growth of gross domestic product (GDP) by 1% plus or minus 0.5 percentage points in the first half of 2016 after the fall by 10% in 2015 and 6.8% in 2014. "The revival... is due to both statistical effects, namely low base, and economic such as the resumption of work of enterprises in the east of the country, a growth in domestic demand due to the level of wages, the reduction of losses because of a lower load (social security tax) on payroll," the ministry said. Simultaneously the agency points out the continuing risks of falling prices in the key commodity markets of Ukrainian exports and restrictions imposed by the Russian Federation. The ministry said that data for the fourth quarter of 2015 confirm the restoration of the Ukrainian economy: according to tentative assessment of the State Statistics Service, the seasonally adjusted GDP grew by 1.5% compared to the previous quarter, while in the third quarter it grew by 0.5% compared to the second quarter. "Last time GDP grew two quarters in a row five years ago, in 2011, when the price boom on the global commodity markets, while now Ukrainian manufacturers operate in the conditions of permanent hostilities in eastern Ukraine and the further fall in the prices of key commodity groups of Ukrainian exports, which is seen three successive years," the ministry said. The ministry said that Ukraine's GDP decline in the fourth quarter of 2015 year-over-year slowed to 1.2% from 7.2% in the third quarter and 17.2% in the first quarter. The ministry reported that the GDP upward pace was supported by the improvement of the pace of all types of economic activities of the real sector, and most of all in construction (a rise of 6.3%) and transport (4.9%), which is linked to the increase of the budget support and natural gas transit.