Page 18 - UKRRptSept18

4.1 Industrial production
Ukraine's industrial output growth accelerated to 2.9% year-on-year in July following a 2.2% y/y growth in June, the Ukrstat state statistics service reported on August 23.
Ukraine’s nationwide industrial production rose by 2.5% y/y in the first half of 2018 , with the increase for June alone at 2.2% y/y, according to data from the State Statistics Committee released in July.
In the extraction sector, the output increase was 1.6% y/y in 1H18, and in the manufacturing sector it was +2.8% y/y, an in the utility sector it was +4.3% y/y.
The industrial production growth of 2.2% y/y in June , despite being marginally below average for the year thus far, is still on track to deliver our forecasted growth of 2.3% y/y for full-year 2018.
In particular sub-sectors, there was a strong 19.1% y/y output increase in auto machinery manufacturing in 1H18 and almost 40% y/y 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% y/y in 1H18.
Meanwhile, the overall machinery industry output index grew at a solid 6.6% pace y/y in January-June, partly due to additional military orders. Ukraine’s defense budget was raised by 34% y/y to UAH86bn ($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% y/y in 1H18 (possibly due to a weather-related early start to the harvest season this year), the construction index advanced by 2.8% y/y, and retail sales rose by 6.2% y/y in the period.
Ukraine's large and medium enterprises see profit grow to $6.8bn in the first half of this year while the share of loss-making enterprises decreased to 28.3% from 31.2% a year earlier. Ukraine's large- and medium-sized enterprises saw pre-tax profit grow by 1.9% in the first half of 2018 year-over-year, to UAH189.781bn ($6.80bn); their pre-tax profit in the first half of 2017 was UAH186.259bn ($6.69bn). Profitable enterprises' results grew by 7.3%, to UAH289.737bn ($10.4bn), while unprofitable ones posted UAH99.956bn in losses ($3.59bn), 19.4% down year-over-year, the State Statistics Service of Ukraine reported on its website. Read also Russian state banks' subsidiaries in Ukraine post largest losses in H1 The share of loss-making enterprises decreased to 28.3% from 31.2% a year earlier. The report does not include data from Russian-occupied areas, namely the Autonomous Republic of Crimea, the city of Sevastopol, and parts of Donetsk and Luhansk regions. As UNIAN reported, large and medium-sized enterprises of Ukraine in 2017 received UAH153.218bn (about $5.67bn) in profit before tax, which was 1.6 times higher than in 2016 at the level of UAH94.039bn ($3.48bn).
18 UKRAINE Country Report September 2018 www.intellinews.com