The growth rate of Ukraine's Gross Domestic Product (GDP) in October slowed to 1.1% compared to 4% in September and 4.4% in August 2024, attributed to the pace of the harvest, as stated in the Monthly Economic Monitoring by the Institute for Economic Research and Political Consultations (IER).
“As in the previous three months, the change in dynamics is primarily linked to varying harvest rates compared to last year. Meanwhile, in October, our estimates indicate a slight slowdown in the recovery of the mining and processing industries, primarily due to Russian shelling of enterprises in Dnipropetrovsk and Russian advances in the Donetsk region,” - explained IER.
At the same time, the absence of planned power outages contributed to economic development due to increased electricity production, although emergency outages occurred due to shelling.
According to IER estimates based on data from the Ministry of Agrarian Policy, the harvest collected in October was significantly lower than the volumes in October 2023, due to a faster collection in September 2024 and lower yields this year. IER clarified that this applies to all crops except beets. In particular, corn was harvested 19% less (compared to October 2023), and oilseeds were nearly half of last year's figures.
At the same time, the situation in livestock farming continued as before, with production of eggs and meat increasing, while milk production fell.
Overall, according to IER assessments, the real gross value added (GVA) in the sector fell by 8% in October 2024 compared to October 2023.
The industrial situation in October was influenced by a number of opposing factors.
“On one hand, the absence of planned power outages and increased domestic and external demand led to a rise in industrial production. On the other hand, Russian shelling harmed the operations of several large enterprises, particularly in Dnipropetrovsk, but not only there,” the institute noted.
It was emphasized that some enterprises suffered damage, while others faced a lack of access to electricity due to damage to power grids. The approach of the frontline and the capture of several settlements, particularly in Selidove, as well as the halting of the mine there and the risk of capturing Pokrovsk, negatively impacted industrial development in the Donetsk region, leading to the evacuation of enterprise workers.
Overall, according to IER's estimates, real GVA in the mining industry decreased by 1.1% year-on-year. At the same time, logistics remained available via rail and the Ukrainian maritime corridor for both agricultural products and iron ore and metallurgical products.
However, unlike previous months, the transport of ore by "Ukrzaliznytsia" significantly decreased. This was partly due to increased grain exports.
The growth rate of real GVA in the processing industry slowed to 5.2% in October from 6.0% in September.
The GVA in electricity production increased by 0.9% year-on-year.
As reported by IER, trade, construction, and transport continued to grow compared to the rates of August and September. The growth rate in trade remained almost unchanged (6.2% in October) due to increased household income.
External trade indicators also improved: real GVA in transport is estimated to have grown by 9.2% (year-on-year), which is somewhat slower than in September. IER associates this, in particular, with the statistical base effect.
As previously reported, the Ministry of Economy also indicated a slowdown in Ukraine's GDP growth in October to 1.3% compared to October 2023, which is worse than September's 3.8%, but better than the August and July figures of 0.3% and 1.1%.