Ukraine Industry


Ukraine: Industrial production falls at sharpest rate since August 2009

September 23, 2014

In August, industrial production fell at its steepest rate since August 2009, shrinking 21.4% over the same month last year. This contraction was even greater than the 12.1% reduction observed in July, according to data released by the State Statistics Service of Ukraine. Sharp drops were recorded in mining and quarrying, manufacturing as well as in electricity, gas, steam and air conditioning supply.

The conflict between the Ukrainian armed forces and pro-Russian armed groups in the eastern regions of the country continues to have a negative impact on industry, which is already weak. Large contractions were recorded in the eastern regions of Luhansk and Donetsk, where the conflict has intensified. Industrial output in July dropped 75.0% annually in Luhansk and 58.7% in Donetsk.

On a monthly basis, industrial production decreased a seasonally-adjusted 12.7% in August, which followed the 2.2% contraction tallied in July. The annual average variation in industrial output fell to minus 46.3% from July’s minus 4.9%.

FocusEconomics Consensus Forecast participants project that industrial output will contract 7.9% in 2014, which is down 1.1 percentage points from last month’s forecast. For 2015, panelists expect industrial production to expand 0.9%.

Author: Angela Bouzanis, Senior Economist

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