Ukraine industrial output declines 3.3% yoy in January

Ukraine’s industrial output declined 3.3% yoy in
January, after a 3.5% yoy drop in December, due to a continuing decline in manufacturing
and a production drop in mining, the State Statistics Service reported on Feb.
25. Seasonally adjusted output decreased 0.5% m/m.

Manufacturing output decreased 5.5% yoy in January
(after an 8.6% yoy drop in December). In particular, output in chemicals
plunged 14.9% yoy while machinery declined 11.9% yoy. Output in metallurgy
dropped 4.5% yoy, food production dropped 1.9% yoy.

Mining output dropped 1.6% yoy in January (after rising
1.8% yoy in December) due to ore production falling 7.1% yoy. Meanwhile, coal
production grew 16.2% yoy while oil and gas output increased 4.3% yoy. The
supply of electricity and natural gas increased 1.3% yoy in January.

Regionally, growth was strongest in the Rivne (22.9%
yoy), Vinnytiya (13.8% yoy) and Zakarpattia (9.6% yoy) regions. Declines were
steepest in the Chernihiv (-17.4% yoy), Khmelnytskiy (-15.5% yoy) and
Ukrainian-controlled Luhansk (-13.0% yoy).

Evgeniya Akhtyrko: January
brought no positive developments for Ukraine’s industrial production. So far,
we don’t see the positive effect of a record grain harvest on the food
industry. Relatively warm weather in January restrained growth in electricity
and natural gas consumption.

We expect Ukraine’s industrial output to increase 2.0%
yoy in 2019 (vs. 1.1% yoy in 2018).