Translated using ChatGPT service.

According to the Central Statistical Bureau's quick estimate of gross domestic product (GDP), in the first quarter of this year, GDP at constant prices was 0.2% lower than a year ago. GDP in the first quarter was affected by declines in both the manufacturing and services sectors. Product taxes collected were also lower.

The negative GDP dynamics are mainly influenced by an unfavorable and uncertain geopolitical situation in the region, as well as high price levels.

A weaker performance in the manufacturing sectors in the first quarter of this year was already expected. In the first two months of this year, the output volumes of the manufacturing sector were 3% lower than a year ago. There was a decrease in the production volumes of the chemical industry, non-metallic minerals, fabricated metal products, and machinery and equipment. At the same time, there are also positive trends in the manufacturing industry – at the beginning of the year, there was an increase in the production of food products, wood and cork products, and printing and paper production. In January-February 2024, there was also a year-on-year increase in the mining and quarrying sector (by 16%) and in the electricity and gas supply sector (by 5.9%).

The situation in the external environment is negatively affecting foreign trade and the volume of goods exports. Overall, in the first two months of this year, the export of goods at current prices was 3.2% lower than in the corresponding period of the previous year. Given that the goods export price index was negative (-5%) at the beginning of the year, this means that the volume of goods exports at constant prices has slightly increased year-on-year.

There is a slight decline in the services sector overall. However, in the first quarter of this year, retail trade turnover at current prices was 2.1% higher (0.9% higher at constant prices) than in the first quarter of the previous year. This indicates that, despite high price levels, there remains a positive trend in private consumption.

Geopolitical uncertainty and high prices are expected to continue impacting economic development, likely resulting in moderate economic activity in the first half of the year. The Ministry of Economics forecasts that overall, GDP will grow by 1.8 percent in 2024.