Ukraine’s 1H18 Industrial Output Rise Comes in at 2.5%

July 30, 2018
 

News
Ukraine’s nationwide industrial production rose by 2.5% YoY in the first half of 2018, with the increase for June alone at 2.2% YoY, according to data from the State Statistics Committee released last week. In the extraction sector, the output increase was 1.6% YoY in 1H18, and in the manufacturing sector it was +2.8% YoY, an in the utility sector it was +4.3% YoY.


Commentary
The industrial production growth of 2.2% YoY in June, despite being marginally below average for the year thus far, is still on track to deliver our forecasted growth of 2.3% YoY for full-year 2018.
In particular sub-sectors, there was a strong 19.1% YoY output increase in auto machinery manufacturing in 1H18 and almost 40% YoY growth in chemical products output - which includes fertilizers - in the period. The worst performing sub-sector was electricity equipment machinery, which demonstrated an output contraction of 5.9% YoY in 1H18. Meanwhile, the overall machinery industry output index grew at a solid 6.6% pace YoY in January-June, partly due to additional military orders. Ukraine’s defense budget was raised by 34% YoY to UAH 86bn (USD 3.2bn) for 2018. It is expected that military spending will be equivalent of 2.6% of Ukrainian GDP.           
In other important macroeconomic data, UkrStat said the agricultural production index surged by 11.4% YoY in 1H18 (possibly due to a weather-related early start to the harvest season this year), the construction index advanced by 2.8% YoY, and retail sales rose by 6.2% YoY in the period. 


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