Ukraine Industry

Ukraine

Ukraine: Ongoing conflict with armed groups drives industrial production down further

June 23, 2014

In June, industrial production fell 5.0% over the same month last year, which was down from the 2.1% contraction observed in May according to data released by the State Statistics Service of Ukraine. Sharp contractions were recorded in mining and quarrying, manufacturing as well as in electricity, 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 is having a negative impact on industry in the country, which is already quite weak. Sharp contractions were registered in the eastern regions of Luhansk and Donetsk, where violence continued to escalate in the last few weeks. Industrial output dropped 20.4% annually in Luhansk and 13.7% in Donetsk in June.

On a monthly basis, industrial production contracted a seasonally-adjusted 1.5% in June, which was a tad above the 1.6% decrease tallied in May. The annual average variation in industrial output was stable at May’s minus 4.2% in June.

FocusEconomics Consensus Forecast participants project that industrial output will contract 6.0% in 2014, which is down 1.3 percentage points from last month’s forecast. For 2015, panelists expect industrial production to accelerate to 1.3%.


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Ukraine Industry June 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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