Ukraine industry falls 6.8% in March

Ukrainian industrial production fell 6.8% yoy in March (vs. -3.7% yoy in February), according to state statistics released on April 17. All sectors except pharmaceuticals (+1.8% yoy) contracted: machinery (-17.4%), metallurgy (-11.1% yoy), utilities (-8.3% yoy), mining (-3.5% yoy), and chemicals (-2.8% yoy).

Alexander Paraschiy: A further decline in industrial output is inevitable in light of the armed conflict with Russia. We anticipate a revival in non-Russian external demand for Ukrainian commodities during the upcoming months on the back of the devaluation effect. However, this revival is unlikely to compensate shrinking access to the Russian market. In fact, March industry results are in line with our baseline estimates. Thus, we are keeping our initial forecast for industrial output growth unchanged at -5.1% yoy for 2014.