Ukraine Industry


Political instability adds to weak industrial production figures

In March, industrial production fell 6.8% over the same month last year, which was a deterioration over the 3.7% contraction observed in February and marked the sharpest contraction since May of last year. The slowdown was broad based, with electricity, gas and water recording the biggest decelerations compared to the previous month.

Military escalation in the eastern part of the country is having an impact on industrial production. Most of the Ukraine's industrial factories are located in that area, specifically in the regions of Khariv, Luhansk and Donetsk.

On a monthly basis, however, industrial production benefited from a strong base effect and expanded a seasonally-adjusted 7.4% in March, which was up from the timid 0.3% expansion tallied in February. Annual average growth in industrial output edged down from February's minus 4.2% to minus 4.4% in March.

FocusEconomics Consensus Forecast participants forecast that industrial output will expand 0.2% in 2014, which is down 1.9 percentage points from last month's forecast. For 2015, panelists expect industrial production to accelerate to 2.1%.

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Ukraine Industry Chart

Ukraine Industry March 2014

Note: Year-on-year and annual average variation of industrial production in %.
Source: State Statistics Service of Ukraine and FocusEconomics calculations.

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