Ukraine’s economy is currently in recession, and its GDP has been sliding for the second quarter in a row. This was stated by OPPOSITION PLATFORM – FOR LIFE MP Serhiy Lovochkin.
“Ukraine’s economy continues declining for the second quarter in a row. Real GDP in Q2 2021 has dropped by 0.8 percent compared to the first quarter of this year, while in Q1 2021 it dropped by 1.1 percent compared to the previous quarter. This is an evidence that the national economy is in recession, and the government has no idea how to stop the decline,” Lovochkin said.
He added that economic revival is a slow and uneven process. After the first six months of 2021 (compared to first six months of 2020), retail was the only of the key sectors of the economy that had showed strong growth (+13.8 percent), while construction sector only grew by 0.2 percent, manufacturing industry by 2.1 percent, and freight turnover by 1.7 percent. At the same time, agriculture slid by 8.2 percent over the same period and wholesale trade by 5.7 percent. Overall index of the key economy sectors grew by mere 0.6 percent.
“Comparing the first half of 2021 with the first half of 2019 shows that all key sectors, except retail, were deeply in the red. Over two years, the manufacturing industry fell by 5.7 percent, agriculture by 25.4 percent, freight turnover by 18.5%, construction by 4.1 percent,” the opposition politician said.
According to Lovochkin, this resulted from next to none state support for the key sectors of the economy, stagnation in lending, and deteriorating investment climate, including due to the conflict in the Donbass.
The MP noted that economic recovery is very slow. Given the results of the first half of 2021, the probability of real GDP growing at 4 percent as planned by the government is unsubstantiated.
“According to recent data from the Economy Ministry, the real GDP grew by mere 1.7 percent in the first half of 2021 compared to the same period of 2020. The chances for the real GDP to grow at 4 percent by year end, as planned by the government, are ill-founded,” the politician said.
The parliament member reminded that the National Bank of Ukraine had lowered its forecast for GDP growth in 2021 from 4.2 percent to 3.8 percent based on the results of Q1 2021.
“This means that if the trends continue, Ukraine will not be able to even ‘win back’ its last year decline in economy, not to mention closing down the gap with the ‘prewar’ 2013,” Lovochkin said.Follow @serhiylovochkin