Ukraine industrial production falls 4.7% in 2013

Ukraine’s industrial output fell 4.7% yoy in 2013 (-0.5% yoy in December), according to state statistics released on Jan. 17. Chemical production fell 17.5% yoy, machinery declined 13.8% yoy, metal production decreased 5.8% yoy and utilities lost 1.3% yoy in 2013. Pharmaceuticals (+11.6% yoy), woodworking (+2.6% yoy) and mining (+0.4% yoy) were the only sectors demonstrating growth in the year.

Alexander Paraschiy: A glimmer of hope was the industrial decline decelerating to -0.5% yoy from -5.0% yoy for 11M13. Indeed, all the key sectors improved their performance, though the statistical base in December 2012 was really low. So we can’t draw the conclusion that the economy is starting to improve, especially in light of reports that stocks at metallurgical exporters have been accumulating in recent months.

At the same time, the December stats might be offering a signal that the economic downturn may have reached its bottom. We anticipate 1.4% yoy industrial growth in 2014 after a natural gas price discount and Moscow’s commitment to open its market to Ukrainian metals and machinery.