Page 25 - UKRRptJun21

out of 25 regions posted a decline of industrial output. It dropped the most in Ukraine-controlled Luhansk (-28.0% y/y), Kherson (-10.6% y/y) and Kirovohrad (-10.4% y/y) regions.
“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,” Akhtyrko added. “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% y/y in 2021 (vs. a 4.5% y/y decline in 2020).”
4.2 Inflation
Like everyone else Ukraine is experiencing a surge in inflation, especially from rising food prices. However, as the warm weather starts and the annual deflation period begins as agricultural output rises this pressure is set to fade.
Moreover, a series of dramatic rate hikes by the NBU seems to have already capped the rising inflation, but it is expected to remain elevated for the rest of this year until the economy can rebalance.
4.2.1 CPI dynamics
Annual inflation in Ukraine reached 8.4% year on year in March, slightly slowing from 8.5% y/y in March, the State Statistics Service reported on May 7. Ukraine’s consumer prices increased 0.7% month on month in April after increasing 1.7% m/m in March.
25 UKRAINE Country Report XXXX 2018 www.intellinews.com