Reuters Forecast: Q2 GDP Jumps 10%

Reuters Forecast: Q2 GDP Jumps 10%
By James Brooke Ukraine Business News (UBN)
🔵 Ukraine’s economy will rebound sharply to 10% growth yoy in the second quarter of 2021, breaking five successive quarters of decline, according to a Reuters poll of 12 Ukrainian analysts. The median forecast of analysts has the GDP shrinking by 0.5% yoy in January-March, but then growing by 10.2% in April-June. The sharp rebound comes from a low base: in the second quarter of last year, strict coronavirus controls forced the economy to shrink by 11.4%. If the government does not impose more lockdowns, the analysts’ median forecast is 4% GDP growth for this year.

🔵 Dragon plans to return this year to its pre-pandemic levels of investment, Dragon Capital CEO, said last week at the Global Outlook meeting hosted by the European Business Association. “In the first half of the year, we plan to close five deals together with co-investors and Western funds for about $200 million,” said Fiala, who is also President of the EBA. “We hope to close them in the first half of the year, so we will return to the rates of investments that were before coronavirus.”

Editor’s Note: After a year of doom and gloom, Ukraine escaped 2020 in pretty good shape. The economy shrank by 4%, better than most of Europe and far better than the Ukraine forecasts of minus 7%. Despite travel controls, Ukrainian workers sent home more money than ever. Because of travel controls, Ukrainian tourists spent their money inside the country, boosting retail sales. The prices of Ukraine’s major commodity exports – corn, wheat, iron – strengthened. China’s frenetic railroad and bridge building pushed up iron prices. Ukraine’s own road building program saved construction and made the country a nicer place to live. With luck, economic recovery will continue in 2021 — and we will be spared a repeat of the roller coaster drama of 2020. With Best Regards Jim Brooke

  • Remittances from abroad continued to be strong in 2020 @ $12bln.  We don’t see the ‘brain drain’ that is often published, rather services workers from Poland moved to the UK and now Ukrainian workers are plugging the gap in Poland.  Remittances continue to be a strong stabilizer of the UAH, resulting in the NBU’s record levels of foreign currency reserves.  John

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