Blockade of railway lines in the Donbass slowed down the GDP growth – the National Bank's report

The gross domestic product of Ukraine has increased by 3% for the first quarter. This is stated in the quarterly inflationary report of the NBU, - Livyi Bereh reports.

"The impulse to the growth of economic activity was preserved in the beginning of 2017, business expectations of enterprises were improving. Furthermore, the low comparison base of January 2016 had a positive effect on the indicators of annual activity dynamics in certain activities. However, the opposite effect was observed in February - from fewer days compared with last year's leap year", - is noted in the report.

According to the NBU, the blocking of railway lines in the east of Ukraine greatly slowed down the GDP growth rates by the end of the quarter. "As a result, the rapid slowdown in mining and metallurgical production began (the average daily production of steel and cast iron in March was 15% and 18% respectively less than in January), the indicators of related activities deteriorated", - the report said.

As a result, according to the results of the year, the NBU forecasts that the GDP growth will be only 1.9%, although it could be more. 2.8% was forecasted previously.

Consumer demand in the first quarter remained low despite a double increase in the minimum wage. The seasonally adjusted level of retail turnover did not undergo significant changes on average compared to the corresponding level of the fourth quarter of 2016.

At the same time, the National Bank estimates that investments continued to grow massively. This was indicated by a significant increase in the production of machinery and equipment for the needs of all core activities (including the growth in the production of railway vehicles), high growth rates of construction volumes and an increase in imports of engineering products. At the same time, the annual dynamics of investments was formed against the background of low comparison base.