Real gross domestic product (GDP) of Ukraine in August 2024 year-over-year decreased for the first time since March 2023, a decrease of 2.1%, while in July an increase of 4.4% was recorded, according to the assessment of the Institute for Economic Research and Policy Consulting (IER).

"Value added in agriculture fell, according to IEI estimates, by 23% year-over-year due to the fact that wheat and other crops were harvested earlier than in 2023. Accordingly, most early crops were harvested in July, when real gross value added (GVA) in the sector is estimated to have grown by 27%, leaving less harvest for August this year," IEI explains the negative assessment in the Monthly Economic Monitoring.

It is noted that the harvest of corn and sunflower also began earlier, but this could not compensate for the decline in other crops. In addition, the yield is below the record level of 2023, so overall this year's harvest will be less than last year. In livestock production, the real GVA, according to the IEI, was close to last year's, since the decline in cattle numbers and milk yields were offset by moderate growth in poultry farming and pig numbers.

According to the institute, the situation in other sectors has not changed significantly. GVA growth in the processing industry in August accelerated to 4.8% from 3.4% in July, in particular, growth continued in the food industry, mechanical engineering and metallurgy.

IEI believes that this was facilitated by an improvement in the situation with access to electricity in August compared to July, although the energy sector itself was unable to reach the August 2023 figures in August of 2024.

Production in the mining industry increased by about 1% year-over-year, and an increase in gas production offset a decrease in coal and iron ore production.

According to IEI, transport in August also contributed to the growth of GVA compared to last year, which was influenced by several key factors.

"Ukrzaliznytsia reported a 15% year-on-year increase in transportation. This was also facilitated by the fact that in August 2023 there was virtually no export from the seaports of Odesa, which are now actively continuing to operate. However, exports from Danube ports were affected by the decrease in the water level," the institute said.

The monitoring emphasizes that the rapid growth of wages and consumption deferred at the beginning of the war contribute to the rapid growth of retail trade, although wholesale trade is growing at a very moderate pace.

Therefore, according to the IEI, the growth of real GVA in trade in August amounted to 7% year-over-year, which is close to the July's figure.