Ukraine industrial output jumps 13% in April

Ukraine’s industrial output increased 13.0% yoy in
April accelerating from a 2.1% yoy growth in March, the State Statistics Service
reported on May 24. Seasonally adjusted output advanced 2.7% m/m in April. In
4M21, industrial output inched up 1.5% yoy (vs. 7.0% yoy decline in 4M20).

Manufacturing output surged 18.0% yoy in April (after
a 2.5% yoy increase in March). The accelerated growth was mostly driven by
metallurgy and machinery which advanced 29.1% yoy and 41.0% yoy respectively.
In addition, textile production surged 58.2%, wood processing added 32.7% yoy.
Chemicals production increased 8.6% yoy. Meanwhile, food production dropped
3.4% yoy and pharmaceuticals dropped 10.0% yoy.

Mining production increased 6.9% yoy (vs. a 1.5% yoy
decline in March). In particular, coal production surged 44.9% yoy, iron ore
production advanced 11.8% yoy. Meanwhile, oil and gas production declined 3.8%
yoy.

The supply of electricity & natural gas increased
4.5% yoy, slowing from 7.3% yoy growth in March.

Regionally, the highest industrial growth in April was
observed in Chernivtsi (two-fold yoy increase), Ternopil (46.0% yoy) and
Zakarpattia (42.0% yoy). Six out of 25 regions posted a decline of industrial
output. It dropped the most in Ukraine-controlled Luhansk (-28.0% yoy), Kherson
(-10.6% yoy) and Kirovohrad (-10.4% yoy) regions.

Evgeniya Akhtyrko: The high
year-on-year industrial growth in April was expected given the bottomed-out
comparative base of April 2020 (-15.1% yoy).

Meanwhile, the decline in domestic food production
continues which is likely to be caused by not only agricultural supply drops
amid lowered agricultural production in 2020 but also by the disruption of
economic ties and the failure of auxiliary businesses during the Covid crisis.

Ukraine’s industry will post an impressive growth
in May, which will be mostly the result of the low comparative base. We expect
industrial output to increase around 4% yoy in 2021 (vs. a 4.5% yoy decline in
2020).