Ukraine industry grows 1.2% in August

Ukraine’s industrial production recovered by 1.2% yoy
in August after a 2.6% yoy drop in the prior month, driven by chemicals,
machinery and metals, the State Statistics Service reported on Sept 21. For
8M17, industry fell 0.4% yoy.

Output of chemicals sped up to 33.0% yoy (26.7% yoy in
July), machinery strengthened to 10.4% yoy (vs. 9.1% yoy in the prior month)
and metals turned into 1.0% growth yoy from a 4.9% yoy decline in July. Mining
fell 6.8% yoy (-9.4% yoy in the prior month) and utilities dropped 2.8% yoy
(-11.9% yoy).

By region, the strongest decline was registered in
Luhansk (-37.0% yoy), Donetsk (-13.6% yoy) and Kyiv city (-10.1% yoy). The best
performers were small regions of Chernihiv (23.6% yoy growth), Ivano-Frankivsk
(21.9% yoy) and Khmelnytsk (14.2% yoy).

Alexander Paraschiy: Industrial
production improved but it remained weaker than we expected. It’s particularly
surprising to see metallurgy growing only by 1% yoy and iron ore extraction
falling 3.1% yoy amid soaring steel prices and prices for iron ore at the
global markets. In fact, the August results leave slim chances for our initial
forecast of 1.4% yoy industrial growth to become reality. We are not revising
our projection, however the tendency we observe tells us that industrial growth
could be below the 1% mark in 2017.