Page 27 - bne IntelliNews Country Report: Ukraine Dec17

4.3 Fixed investment
2008 2009 2010 2011 2012 2013 2014 2015 2016E
Investments in fixed
capital, chg yoy 1.60% -50.50% 3.90% 7.10% 0.90% -6.70% -23.00% -9.30% 6.00%
Industrial output, chg
yoy -5.20% -21.90% 11.20% 8.00% -0.70% -4.30% -10.10% -13.00% 2.00%
Investments in fixed assets in Ukraine grew 20.7% y/y in 9M17, slowing from 22.5% y/y growth in 1H17, the State Statistics Service reported on November 24. The growth was driven by investments in state administration and defense (58.9% y/y growth), transport infrastructure (57.9% y/y), agriculture (36.7% y/y) and industry (22.0% y/y).
Investments in industry were driven by carpentry (89.8% y/y growth), iron ore extraction (48.3% y/y), oil and gas extraction (29.0% y/y), and metal production (27.6% y/y). Regionally, the Dnipropetrovsk region (29.3% y/y) and Kyiv city (22.5% y/y) contributed the most to investment growth in 9M17.
Local investments eased but they still grew in the double digits. Bankers estimated a 18.2% y/y investments increase in 3Q17 from 23.3% y/y growth in the prior quarter. The main sources for the slowdown were oil and gas extraction (-18.4% y/y in 3Q17 vs. 105.2% y/y growth), telecommunication (-8.5% y/y vs. 42.2% y/y growth) and construction (-2.8% y/y vs. 35.2% y/y growth).
The high comparative base for all the sectors explains their drop in 3Q17. Last year, investments in fixed assets were strong (27.2% y/y growth in 3Q16) and the above-mentioned sectors were among the drivers for that surge. Against this backdrop, we are keeping our initial forecast unchanged at 19.8%
27 UKRAINE Country Report December 2017 www.intellinews.com