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Ukraine

Ukraine's government seeks more aid as Q1 GDP falls by one-fifth

  • Real GDP fell by 19.3% qoq (sa) in Q1 and by 15.1% yoy after Russia's invasion of Ukraine

  • The IMF projects a 35% decline in real GDP this year

  • Ukraine is in discussions on new IMF programme as more aid is needed

Ukraine's government seeks more aid as Q1 GDP falls by one-fifth
Stuart Culverhouse
Stuart Culverhouse

Head of Sovereign & Fixed Income Research

Tellimer Research
10 June 2022
Published by

Ukraine’s real GDP fell by one-fifth in Q1, following Russia’s invasion of Ukraine, according to new data published by the State Statistics Committee on 9 June.

Real GDP fell by 19.3% qoq (sa) and by 15.1% yoy in Q1, the sharpest annual decline since Russia’s annexation of Crimea in 2015. The war, which began in late February, would have impacted c40% of the quarter.

Ukraine real GDP growth (% yoy)

Further, and possibly deeper, declines may therefore be expected in Q2, although there are also signs that activity is beginning to return more to normal in Kyiv, and elsewhere in the west, in recent weeks as Russia concentrates its military efforts in eastern Ukraine. Ukraine reported last week that Russia had seized 20% of its territory.

The IMF projects a 35% decline in real GDP this year, as per the April WEO. Ukraine’s finance minister Serhiy Marchenko has also called for a new IMF programme to help bolster the country’s finances, with preliminary discussions underway, according to a Bloomberg report this morning. The Fund approved US$1.4bn in emergency financing, through its rapid financing instrument (RFI), in March. Much more is needed.

The government said earlier this week that it is hoping to receive up to US$20bn in international aid by year-end (although it is not clear to us if that includes existing disbursements and commitments).