February 24, 2015

In January, industrial production fell 21.3% over the same month last year, according to data released by the State Statistics Service of Ukraine. The result was a deterioration from December’s 17.1% decrease and marked the 13th consecutive month of decline amid the geopolitical tensions in the country. Further, January’s figure marked the sharpest drop in 65 months. Significant falls were recorded in manufacturing, mining and quarrying, as well as in electricity, steam, gas and air conditioning.



The ongoing crisis between the Ukrainian government and pro-Russian separatist groups continues to have a large negative impact on industry, which is already weak. Large contractions were recorded in the eastern regions of Luhansk and Donetsk, Ukraine’s industrial heartland and where the conflict has been centered. Industrial output in January plummeted 87.0% annually in Luhansk and 49.9% in Donetsk.



On a monthly basis, industrial production decreased a seasonally-adjusted 19.7% in January, which was a significant deterioration from the 1.7% fall in December. The annual average variation in industrial output fell to minus 11.5% from December’s minus 10.1%.

FocusEconomics Consensus Forecast participants’ project that industrial output will contract 3.5% in 2015, which is unchanged from last month’s forecast. For 2016, panelists expect industrial production to rise 3.4%.