According to the representatives of the Ministry of Economy, during July, the growth of Ukraine's GDP accelerated to 2.7% compared to 1.6% growth in June.
Points of attention
- Early harvesting played a crucial role in accelerating Ukraine's GDP growth to 2.7% in July, despite energy capacity shortages caused by attacks on critical infrastructure.
- The government of Ukraine revised its economic growth forecasts downwards due to the expected continuation of the war, with GDP growth estimated at 4.0% [±1%] for 2024.
- Producers' adaptation to challenging conditions and early harvesting helped offset the negative impacts of electricity shortages in July, contributing to the growth of the economy.
- The Ministry of Economy emphasizes that stable access to electricity through direct imports, early crop harvesting, and budgetary financing of engineering projects were key factors in maintaining production rates and reducing consumer costs.
- Government forecasts project a significant downturn in the growth of Ukraine's GDP for 2024 and 2025, indicating the impact of ongoing military conflicts on the country's economic outlook.
What is known about the reasons for the accelerated growth of Ukraine's GDP
The Ministry of Economy noted that early harvesting led to the acceleration of GDP growth.
As a result, for January-July 2024, growth is estimated at the level of 4.0% [±1%], which generally corresponds to the forecasted trends, the department emphasizes.
It is emphasized that in July, the Ukrainian economy was operating under extremely tight blackout schedules due to a shortage of energy capacity caused by criminal army attacks on critical energy infrastructure facilities.
This, in turn, made it difficult to maintain production rates at enterprises and led to an increase in consumer costs.
At the same time, it was possible to compensate for the negative impact of the electricity shortage thanks to:
adaptation to difficult working conditions, in particular, the ability of individual producers to ensure stable access to electricity thanks to direct imports;
the early start of harvesting winter crops due to the weather;
stable operation of the Ukrainian Maritime Corridor;
budgetary financing of the construction of engineering structures.
What is known about the economic forecasts of the Ukrainian government
The government of Ukraine significantly worsened the forecast for the growth of the Ukrainian economy in 2025 — 2.7%. Previously, growth of 6.8% was expected.
In addition, the Ministry of Economy worsened expectations for the growth of Ukraine's gross domestic product in 2024 from 4.6% to 3.5%.
The budget plan for security and defense shows that the government expects the war to continue in 2025 and end in 2026.
