Reduction in investment remains key factor behind GDP decline in Ukraine

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A further reduction in investment remains a key factor behind the decline in gross domestic product (GDP) in Ukraine, according to a report released by the National Bank of Ukraine (NBU).

In Q3 2020, real GDP decreased by 3.5% in annual terms. At the same time, amid the recovery in consumer demand and business activity since the easing of quarantine restrictions, real GDP in Q3 grew by 8.5% compared to Q2 in seasonally adjusted terms. The further contraction of investment remains a key factor behind the drop in GDP. The decrease in gross fixed capital formation deepened to 23.8% in annual terms and was observed in almost all sectors, despite the improvement in the financial performance of companies.

“Businesses held back from investing due to the increase in COVID-19 cases and uncertainty around the further spread of disease. Unresolved issues in alternative energy also had a negative impact. Significant growth in capital investment was seen only in postal and courier activities amid a robust growth in delivery services and online trade,” reads the report.

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