In July 2024, Ukraine’s GDP grew by 2.7% [±1%] compared to July last year. As a result, for the first seven months of this year, GDP growth is estimated at 4.0% [±1%] compared to the same period last year. These data were released by the Ministry of Economy.

“In July, the economy operated under conditions of rolling blackouts due to power shortages. This hampered economic activity of both businesses, amid rising costs, and consumers of goods and services. Nevertheless, the economy managed to offset the negative impact of the electricity shortage. This was facilitated by the high level of business adaptability to difficult conditions and experience in responding to such challenges. Some businesses have secured stable access to electricity through direct imports. The early start of the winter crop harvest, stable operation of the Ukrainian Sea Corridor and budget funding for the construction of engineering structures also had a positive effect on GDP growth,” said Yuliia Svyrydenko, First Deputy Prime Minister and Minister of Economy of Ukraine.

According to her, the economic growth rate of 4.0% in the first seven months of 2024 is currently in line with the updated government forecast. Real GDP growth is expected to reach 3.5% in 2024.

At the same time, the shortage of skilled workers has a negative impact on business expectations and restrains their economic activity.

According to Yuliya Svyrydenko, the positive dynamics of domestic trade continued in July, driven by a gradual increase in consumer demand. The construction sector was also recovering, with the main growth drivers being budgetary funding for the restoration of damaged critical infrastructure, capital reconstruction, and road repairs in emergency areas.

In July, the agricultural sector continued to grow significantly. The main factor was an increase in the harvest of winter crops. Due to weather conditions, the harvesting campaign was able to start earlier. In livestock, positive dynamics continued as a result of stable demand in the domestic market and government support for producers. At the same time, higher costs of using backup power have a negative impact on poultry producers.

In the industrial sector, companies maintain production activity thanks to direct electricity imports and their experience in responding to energy challenges. However, the rising costs of securing alternative sources of electricity are holding back production growth.

High security risks and the consequences of the destruction of energy infrastructure remain key unresolved issues. Restoring the energy sector will take time and resources. According to forecasts, this may slow down the pace of recovery in production activity. Logistical problems and the difficult situation on the labour market also remain negative factors for the economy.