In June 2024, Ukraine's GDP grew by 1.1% [±1%] compared to June last year. As a result, for the first half of the year, GDP growth is estimated at 4.1% [±1%] compared to the same period last year. These data were released by the Ministry of Economy.
The main factor behind the slowdown in economic growth was the power cuts caused by electricity shortages. However, despite the negative factors, economic recovery continues, the Ministry said.
"During June, the economy operated in difficult conditions of power outages, which weakened the economic activity of both enterprises and consumers. However, due to the high level of adaptability to difficult conditions and experience in responding to such challenges, the Ukrainian economy continued to grow. Among the factors that contributed to this were the high rates of exports of mining and metals products and the early start of winter crops harvesting," said Yuliya Svyrydenko, First Vice Prime Minister of Ukraine and Minister of Economy of Ukraine.
Among the positive factors that influenced economic growth, she mentioned the stable operation of the Ukrainian sea corridor and the ability of individual enterprises to ensure stable access to electricity through direct imports.
According to her, the economic growth rate of 4.1% in the first half of 2024 is currently in line with the updated government forecast, according to which real GDP growth is expected to reach 3.5% in 2024.
At the same time, the analysis shows that the shortage of skilled workers is having a negative impact on business expectations.
In general, according to Yuliya Svyrydenko, positive dynamics in domestic trade continued in June. The construction sector also grew, with the main drivers of growth being budgetary funding for the restoration of damaged critical infrastructure, capital reconstruction, and road repairs in emergency areas.
There was also significant growth in agriculture due to the earlier start of the harvest due to weather conditions, which allowed the country to cultivate more land and harvest more crops.
In livestock, the positive dynamics continued due to stable domestic demand and government support for producers.
At the same time, the increase in production costs due to the use of backup power is having a negative impact on poultry producers, particularly egg producers.
Currently, high security risks and the consequences of the destruction of the energy infrastructure remain key unresolved issues. Restoring the energy sector will take time and resources, which is expected to slow the pace of recovery in production activity.
Logistical problems and the difficult situation on the labour market also remain negative factors for the economy.