Summary

According to a fresh report from Ukraine’s State Statistics Committee, the country’s real GDP grew by 0.1% in the first quarter of 2016.  The reported growth may look negligible but this is the first such occurrence since the fourth quarter of 2013, the time Ukraine was about to slide into its all-round and deepest crisis in history.  The following two years saw the local economy – which had never been particularly healthy anyway – suffer hugely from domestic political turbulence, Russia’s annexation of Crimea, and the destructive conflict with Russia-backed separatists in Donbas.

The return to even such a weak growth is therefore a noteworthy and welcome development.  Until then, although Ukraine reached a kind of macroeconomic plateau a few months ago, it was still unclear as to when its battered economy may begin to rebound.  So now that the economic contraction is confirmed to have at least stopped, the question is whether the economy has really left the worst of its crisis behind and is finally on the recovery path.

Available indicators suggest that the bottoming-out is indeed taking place and this is true for all the main fronts.  However, the pace of that process is extremely slow, especially when compared to how fast the economy was falling.  Moreover, many registered improvements turn out rather relative, being primarily a reflection of statistical base-effects.  Besides, the recovery so far proves patchy even within certain sectors and is certainly not an equally visible phenomenon everywhere.  In any case, if Ukraine is to shrug off the economic disaster of the past two years, it already needs to perform much, much better than has been the case to-date.