According to the latest data, the output in the construction sector fell by 32.4% in the fourth quarter, financial activities by 30.2%, the recycling industry by 23.9%, the extracting industry by 18.7%, trade by 15.6%, the production and distribution of electricity, gas and water by 14.3%, and transport and communications by 3.9%.
In fact the general GDP contraction would have been much worse if it had not been for the good showing of the agricultural sector, which grew by 23.5% due the record harvest.
The Statistics Committee also confirmed a 2.1% increase in real GDP in 2008, compared to 7.9% in 2007. The Ukraine government initially forecast last year's GDP growth at 6.8%, but lowered its forecast to 1.8-2.5% towards the end of the year.
This year, the Ukraine Council of Ministers expects a slowdown in Ukraine economic growth to 0.4%, while economists generally expect a decline of around 5-10%. The government has now stopped providing monthly GDP estimates, so the first detailed GDP statistics we will see for this year will only be released in late May.
Update: March Inflation and Revised World Bank Forecast
Ukraine’s inflation rate, the highest in Europe, fell for a seventh month in March as real wages fell, weakening domestic demand. The annual inflation rate declined to 18.1 percent, from 20.9 percent in the previous month. Month on month, prices rose 1.4 percent, after a 1.5 percent gain in February. Producer prices, often regarded as an early indicator of consumer prices, fell to 12.8 percent in March, the lowest rate of increase since September 2006. Month on month, producer- price growth slowed to 1.1 percent.
The hryvnia has lost about 9 percent against the euro in the past month as the government struggles to maintain its pledge to keep inflation within 9.5 percent this year, compared with 22.3 percent in 2008.
Ukraine’s economy will shrink as much as 9 percent this year, twice as much as previously estimated, according to a revised World Bank forecast citing a deterioration in the global outlook and government delays in addressing the crisis.
“We may lower the forecast further if the external environment worsens or the authorities delay anti-crisis measures,” World Bank economist Ruslan Piontkivskyi said at a press conference in Kiev today.
The WB had previously forecast Ukraine’s gross domestic product will contract 4 percent this year.