Ukraine industrial output rises 3% yoy in April

Ukraine’s industrial
output rose 3.0% yoy in April, the State Statistics Service reported on May 23,
mostly owing to mining and utilities. Growth accelerated from 1.0% yoy in the
prior month, while seasonally adjusted output dropped 0.6% m/m
in April.

In 4M18, industrial
output increased 2.6% yoy.

April manufacturing
picked up 0.8% yoy after a 4.6% yoy decline in March. Metallurgy inched up 0.3%
yoy (after a 3.7% decline in March), while machinery jumped 5.2% yoy (after a
2.8% drop in March). The decline in food production decelerated to 4.1% yoy
(from 8.0% in March). Growth in chemicals slowed to 31.1% yoy (from 39.4% yoy
in March).

Mining production
advanced to 5.6% yoy growth in April from 3.3% growth in March. Ore mining
jumped 9.0% yoy, while oil and gas production dropped 1.6% yoy. Coal mining
rose 13.2% yoy due to a low comparative base from the prior year, while utilities
output increased 8.6% yoy.

Regionally, growth
was strongest in Ivano-Frankivsk (14.4% yoy), the Ukrainian-controlled part of
Donetsk (11.5% yoy) and Volyn (8.3% yoy). Declines were steepest in Rivne
(-23.1% yoy), Khmelmytskiy (-19.9% yoy) and Vinnytsia (-11.8% yoy).

Evgeniya Akhtyrko: April’s results only slightly added
to industrial performance since the beginning of the year. The continuing
decline in food production is especially disappointing given the large weight
of this sector in Ukraine’s industry. Moreover, the declining domestic food
supply counteracts government efforts to curb high consumer inflation.

So far, industrial performance is falling substantially behind our
forecast of 4.6% yoy expansion in 2018. Hopefully, the 2018 crop, which is
expected to be higher than last year, will help food production improve in
2H18, pushing the overall industry result higher.