Page 17 - UKRRptAug21

Mining sector’s production slowed to 2.5% y/y growth (from 6.9% y/y growth in May). In particular, coal production increased 3.5% y/y, and iron ore production advanced 4.2% y/y. Meanwhile, oil and gas production declined by 1.3% y/y.
The supply of electricity & natural gas declined 5.5% y/y (vs. a 3.5% y/y decline in May).
Regionally, the highest industrial growth in June was in Odesa (72.7% y/y%), Rivne (22.3% y/y) and Zakarpattia (21.3% y/y). Ten out of 25 regions posted a decline of industrial output, which dropped the most in Kirovohrad (-34.3% y/y), Ukraine-controlled Luhansk (-23.0% y/y) and Vinnytsia (-12.9% y/y).
“The industrial results in June are disappointing. The growth in metallurgy and mining is slowing, as the effect of the low comparative base of the previous year wears off and unutilised capacity reserves are being exhausted. Food industry is unable to exit the downward trend even despite a healthy consumer demand. Other important industrial sectors are failing to demonstrate a consistent improvement. With such a weak result for 1H21 we don’t see much chance for Ukraine’s industry to be anywhere close to rebounding from the fallout of 2020 (-4.5% y/y). If the combination of supply and demand doesn’t improve substantially in 2H21, Ukraine’s industrial growth is likely to land [at] around 2% in 2021,” an analyst at the Kyiv-based Concorde Capital brokerage said in a research note.
4.2 Inflation
Annual inflation in Ukraine amounted to 9.5% y/y in June, staying unchanged from the previous month, the State Statistics Service reported on July 9. Ukraine’s consumer prices inched up 0.2% m/m in June after jumping 1.3% m/m in May.
17 UKRAINE Country Report August 2021 www.intellinews.com