The key factor behind the decline in GDP in the third quarter of 2020 is the decline in investment.
The National Bank of Ukraine (NBU) has said this in a statement, Ukrainian News Agency reports.
It is noted that in the third quarter of this year, real GDP decreased by 3.5% in annual terms.
At the same time, amid recovery in consumer demand and business activity after the quarantine relaxation, real GDP in the third quarter, if compared with the second quarter, rose by 8.5% in seasonally adjusted terms.
"The actual indicators turned out to be better than the NBU estimate, which was published in the Inflation Report for October. The deviation was due to the rapid recovery in consumption, while the key factor in the fall in GDP remained a further reduction in investment," the statement reads.
The decrease in gross fixed capital formation deepened to 23.8% year over year and was observed in almost all types of activities, despite the improvement in the financial results of enterprises.
Business has refrained from investment due to the spread of the morbidity and uncertainty about the development of the pandemic.
Unresolved issues in alternative energy also had a negative impact.
Only postal and courier activities showed a significant increase in capital investment due to the development of delivery services and online commerce.
In turn, consumer demand recovered, while household consumer spending increased by 1.0% year over year, which was facilitated by the quarantine relaxation and an increase in citizens' incomes.
It is indicated that in the context of activities in the third quarter, there was a recovery in all sectors of the economy, although only some of them increased production when compared with the previous year.
Agriculture kept a significant contribution to the drop in GDP due to the worst harvest this year.
In turn, the quarantines relaxation and a recovery in consumer demand amid less opportunities for external tourism boosted trade and slowed down the decline in value added in the service sector.
In particular, the hotel and restaurant business, the arts, sports and entertainment, and the real estate sector showed the best dynamics.
As Ukrainian News Agency earlier reported, in July-September 2020, according to operational data, the real gross domestic product (GDP) decreased by 3.5% (in constant 2016 prices) compared to the same period in 2019 to UAH 1,156.797 billion (in actual prices).
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