Ukraine industrial output drops 5% in August

Ukraine’s industrial output dropped 5.3% yoy in
August, accelerating from a 4.8% yoy decline in July, the State Statistics
Service reported on Aug. 23. Seasonally adjusted output slid 0.1% m/m. In 8M20,
industrial output dropped 7.4% yoy.

Manufacturing output fell 7.7% yoy in August (after a
6.6% yoy decline in July). In particular, food production switched to decline
of 0.4% yoy (after 4.6% yoy growth in July), while metallurgy output plummeted 10.4%
yoy (vs. a 10.4% yoy drop in July). Machinery production slid 22.8% yoy (after
a 21.3% yoy fall in July).

Meanwhile, production of pharmaceuticals surged 14.1%
yoy (vs. a 19.6% yoy drop in July), while coke and oil production advanced 5.3%
yoy (vs. 9.4% yoy decline in July).

Mining output sild 0.1% yoy in August, after declining
0.7% yoy July. In particular, iron ore production dropped 3.8% yoy, while coal
production increased 3.3% yoy and oil & gas production inched up 0.3% yoy.
The supply of electricity & natural gas dropped 4.6% yoy after a 0.7% yoy
decline in July.

Regionally, the steepest declines were observed in
Odesa (-28.9% yoy), Dnipropetrovsk (-16.5% yoy) and Zaporizhia (-12.7% yoy)
regions. Industrial output grew the most in the Ukraine-controlled Luhansk
(43.8% yoy), Rivne (37.7% yoy) and Ternopil (9.7% yoy) regions.

Evgeniya Akhtyrko: It’s
disappointing to see some acceleration of industrial decline in August after
the situation was improving during the prior three months. Meanwhile, the
metallurgy and machinery sectors remain stagnant, while the advancement in
other major sectors is not consistent.

We expect industrial output to drop 6% yoy in 2020
(vs. a 0.5% yoy decline in 2019).