The Ukrainian Prime Minister is optimistic about the economic outlook for 2021. He says that the economic recovery has started after the Covid-19 pandemic.
The Ukrainian GDP fell by around four percent in 2020 due to the Covid-19 pandemic. It came after four years of growth in the Ukrainian economy, which was about to reach the level from 2013 before the Maidan Revolution, the Russian annexation of Crimea, and the war in Donbas, according to numbers from Tradingseconomics.
The Gross Domestic Product (GDP) in Ukraine in billion US dollars.
The Ukrainian Prime Minister Denys Shmyhal says that the economic recovery caused by the Covid-19 pandemic has started now in Ukraine.
“In 2021, we must lay a solid foundation so that the Ukrainian economy grows at a faster pace in the years to follow. At the same time, already in the first four months of this year, we are recording positive trends, which show that the Ukrainian economy has begun to recover from coronacrisis,” Shmyhal wrote on Facebook, according to Unian.
Despite the Prime Ministers’ positive outlook, the Ukrainian GDP decreased by 2,8 percent in the first two months of 2021. The National Bank of Ukraine, NBU, recently downgraded its forecast for GDP growth in 2021 to 4.2 percent. It will almost make up for the loss in 2020. NBU recently believed that GDP would increase by 4.9 percent in 2021.
Shmyhal points out that industrial output grew by 13 percent in April, compared to April in 2020 when Ukraine was under total lockdown due to the virus. The industrial output also increased by 1.5 percent for the first four months of the year. Mechanical engineering expanded by 6.5 percent over the same period, according to the Prime Minister. Retail sales increased by 14 percent in the first four months, Shmyhal wrote and added that the average nominal wage rose by 30 percent in April 2021, compared to April 2020.
“The export of Ukrainian products in the first four months of this year were up by almost 20 percent. In the first quarter of 2021, the main markets for our goods are China (14.2 percent of total exports), Poland (7.6 percent), and Turkey (6.4 percent). Recently, eight new markets have opened, including in Africa and South America. Exporters are constantly supported through new state products and formats,” Shmyhal wrote.
Protectionism hurts the Ukrainian economy
The Ministry for Development of Economy, Trade, and Agriculture of Ukraine recently said that the 2.8 percent decline in GDP in the first two months of 2021 was primarily due to the new lockdown in Ukraine and protectionism in key export markets.
“The pace of economic recovery will depend on the duration and toughness of the lockdown restrictions. A resurgence will begin only in Q2, with regard to the past year’s low comparison base and the roll-out of vaccination campaigns both globally and domestically,” said the Ministry, according to GMK Center.
The Ministry added that the economic activity in the industrial sector in Ukraine decreased by 4.6 percent in the first two months of 2021. Mining fell by 3.9 percent, steel industry by 3.5 percent, processing industry by 6.7 percent, mechanical engineering by 7.0 percent, and the textile industry fell by 6.7 percent in the first two months.
The Ministry, however, believes that industrial growth this year will be around five percent.