Ukrainian industry drops 3.2% in January

Industrial production declined 3.2% yoy in January, according to an UkrStat report on Feb. 18. All core industries shrunk yoy over the month: oil refinery (-26.6%), chemical industry (-19.9%), metallurgy (-8.6%), machinery (-7.8%), mining (-3.6%) and utilities (-1.0%).

Alexander Paraschiy: Despite the January yoy decline being not as dramatic as a month ago (-7.6% in December), we do not see any reason for optimism. It looks like Ukrainian industry isn’t benefiting from reviving resource prices, which is very bad news for the Ukrainian economy. What’s more, we see sliding demand for Ukrainian machinery from Russia on the back of weakening growth in the country and politically motivated restrictions. Against this background, we can hardly expect industrial growth to exceed 1% in 2013 even if the markets are revived in 2H13.