Ukraine: Political instability adds to weak industrial production figures
April 24, 2014
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%.
Author: Dirina Mançellari, Senior Economist