Ukrainian industry decline slows to -2.1% in May

Ukraine’s industrial output declined 2.1% yoy in May, slowing down from -6.0% yoy in the prior month, according to state statistics released on June 18. Chemical production (-20.8% yoy), machinery (-15.3% yoy), metallurgy (-2.0% yoy) and mining (-1.9% yoy) continued falling through the month. At the same time, growth was reported by utilities (+7.3% yoy), food production (+6.3% yoy) and pharmaceuticals (+4.0% yoy).

Alexander Paraschiy: May’s improvement is the result of a low statistical base, to a large extent. A year ago in May, industry fell by almost 10% yoy in what was the deepest monthly decline through the year. Still against the backdrop of military actions in the east, it is a very good result for domestic industry. So it’s possible we’re observing the first signs of the economy stabilizing. No doubt, industry will be in red at least over the next few quarters but we can hardly talk about a deepening crisis in the coming months (under the assumption of no large-scale Russian military intervention). We are keeping our industrial output forecast unchanged at -5.1% yoy for 2014.