Industrial production rises 11% y-o-y in 2010, after -22% y-o-y in 2009

Ukraine’s industrial production went up 11% in 2010 after -21.9% in 2009, according to data released yesterday by the State Statistics Committee. Mykyta Mykhaylychenko: In December in particular, the growth rates accelerated to +12.5% y-o-y, from +9.9% y-o-y in November, which happened on the back of faster growth in metallurgy (to +12.0% y-o-y in December vs. +10.9% y-o-y in November) and utilities (to +7.1% y-o-y vs. +0.2% y-o-y, respectively). The improved performance of export-oriented metallurgy was driven by favorable external conditions as average export metal prices increased 11% over 4Q10 and almost reached their recent peak of August-2010. For 2011 we expect industrial production to add 7.0%-7.5% in real terms on the assumption of stable external demand and improved domestic demand, which is to be positive for the food industry (~16%-17% of all industrial sales) in particular (deceleration in total industrial growth will be due to, among other, a higher base effect in 2011 as compared to that in 2010).