Ukraine industry falls 5.2% in January

Ukraine’s industrial output in Ukraine fell 5.2% yoy in January (compared to -0.5% yoy in December), according to state statistics released on February 18. Key sectors deepened their declines, led by machinery (-22.9% yoy), metals (-10.1% yoy), chemical production (-8.3% yoy) and utilities (-0.9% yoy). At the same time, iron ore mining (+3.4% yoy) and oil refinery (+10.5% yoy) reported growth.

Alexander Paraschiy: January’s industrial output decline was much deeper than we expected. Though output somewhat improved in December, it was primarily due to accumulated stocks. Producers hoped for some improvement of external demand but it did not happen. As a result, we see key industries sinking deeper at the start of 2014.

We anticipate industry falling 1.4% yoy by the end of the year. The declines will likely be fueled by the sluggish Russian economy, devalued Russian ruble and Turkish lira, as well as the anticipated drop in domestic investment.