Daily Insight-In the spotlight: 2Q10 economy\\\'s growth pattern; agriculture news; Metinvest and DTEK news

Yesterday, the State Statistics Committee published its detailed release on 2Q10 real GDP growth, which was at 5.9% YoY, and came in as a downward revision of the previously announced preliminary figure of 6.0% growth in year-on-year terms. We cannot argue with the component of GDP contributing the most to the downward revision of real growth due to the fact that the preliminary reading of real GDP growth for a quarter is provided by the statisticians as one figure only, not a detailed release that accompanies the second reading of the indicator. From the expenditure side of GDP, household consumption and net exports contributed to the overall growth of the economy, with the former rising by 5.1% YoY in real terms, while exports expanded by 14.9% YoY, the fastest pace seen since late 2004, when the economy posted a record annual rate of increase of 12.1% YoY for the entire year. Fixed investments declined by 5.5% YoY in 2Q10, accelerating from a 2.2% YoY decline in 1Q10. On a quarterly basis, the economy grew by 3.8% QoQ in seasonally adjusted terms after a 0.3% QoQ contraction seen in the 1Q10. Going forward, we expect the economy to cool down, rising by 3.5% and 3.0% in the 3Q10 and 4Q10, respectively, due to softer demand for Ukrainian exports from abroad. Our full-year real GDP growth rate is forecast at 4.3% YoY for 2010.