Ukrainian Economy Expanded Annual 6% In Second Quarter, Spurred By Exports

KIEV, Ukraine -- Ukraine’s economic expansion accelerated in the second quarter, helped by increased demand for the country’s exports, the state statistics committee said.
Gross domestic product rose 6 percent from a year earlier, the most since the second quarter of 2008, the Kiev-based committee said today on its website. The median estimate of six economists surveyed by Bloomberg was 5.9 percent.

The economy expanded a seasonally adjust 3.9 percent from the previous quarter, the committee said, citing preliminary data.

Ukraine’s economy expanded for a second quarter after a 15.1 percent slump last year, the deepest recession since 1994. GDP advanced 4.9 percent in the first quarter, driven by higher prices for metals, the country’s main export.

The government forecasts a 3.7 percent increase for the full year.

“Buoyant economic growth in the second quarter was driven primarily by exports,” said Olena Bilan, chief economist at Dragon Capital, a Kiev-based investment bank. “Domestically oriented sectors such as retail trade and passenger transportation contributed as well.”

Dragon Capital raised its forecast for 2010 GDP growth to 5.5 percent from 4 percent, “given strong results in the first half,” Kiev-based, Bilan said.

The hryvnia strengthened to 7.8900 per dollar as of 3:53 p.m. in Kiev, from 7.8955 on Aug. 13, Bloomberg data shows. Ukraine’s bond due 2016 rose to 99.870 cents on the dollar from 99.685, pushing the yields down to 6.603 percent.
Ukraine’s exports jumped 33.5 percent in the first half, driven by metals, the Economy Minister said July 23.

Industrial production, which accounts for a quarter of the former Soviet state’s economy, surged 12 percent in the first half, compared with a 31 percent decline in the same period a year earlier.

The Ukrainian unit of ArcelorMittal, the country’s biggest metal producer, said July 5 it increased steel output by 34 percent in the first six months of the year.

GDP expanded an average 7.5 percent from 2000 to 2007, driven by exports, domestic consumption and investments. The country wants to reach “pre-crisis growth” in two years, Prime Minister Mykola Azarov said June 15.

The central bank cut the benchmark interest rate by three- quarters of a percentage point to 7.75 percent on Aug. 9 to boost lending to companies and spur economic activity