Ukraine’s real GDP growth slowed to 4.1% y/y in 3Q19, or 0.6% q/q on a seasonally adjusted basis, to UAH1,405bn ($43.8bn), the State Statistics Service reported on December 19, adjusting downward its preliminary estimate of 4.2% y/y, or 0.7% q/q growth.

Economic growth slowed from 4.6% y/y in 2Q19 mostly due to weaker real growth of private consumption, which advanced 8.5% y/y, slowing from 11.8% y/y in 2Q19.

“It looks like private consumption growth, which is Ukraine's main economic driver, has started cooling. Meanwhile, the negative contribution of net exports to GDP softened in 3Q19, as real export growth significantly outpaced the growth of imports,” Evgeniya Akhtyrko of Concorde Capital said in a note.

Meanwhile, investment growth accelerated to 13.9% y/y (vs. 7.9% y/y growth in 2Q19). The contribution of net exports to GDP remained negative. Real export growth advanced to 13.5% y/y (vs. 4.4% y/y growth in 2Q19), while imports slowed to 6.2% y/y growth (vs. 9.1% y/y growth in 2Q19).

On the production side, weaker GDP growth in 3Q19 was mostly due to slower value-added growth in agriculture (6.0% y/y in 3Q19 vs. 7.3% y/y in 2Q19) and a decline in manufacturing of 0.4% y/y (vs. 0.8% y/y growth in 2Q19).

The value added in construction continued to grow fast, advancing to 20.6% y/y (vs. 20.5% y/y in 2Q19).

The GDP deflator declined to 6.8% in 3Q19 from 9.4% in 2Q19.

“We expect economic growth to weaken significantly in 4Q19. The decline in manufacturing will intensify, while we expect mining output to switch into the red. Additionally, agricultural output is expected to be much weaker. We expect Ukraine’s GDP to have increased 3.5% y/y in 2019 (vs. 3.3% y/y growth in 2018),” Akhtyrko added.