Page 20 - UKRRptDec19

the sustained domestic demand, higher productivity in agricultural production, and improved consumer sentiment. In the meantime, slower growth in the global economy and worsened terms of trade will weigh on economic growth in 2020," the central bank's statement reads.
The European Bank for Reconstruction and Development (EBRD) believes that Ukraine’s economy remained resilient to political factors but the pace of growth will stay "somewhat modest", ​with a 3.3% y/y growth in 2019​.
The country’s GDP growth will accelerate slightly to 3.5% y/y in 2020, according to the EBRD's Regional Economic Prospects report published on November 6. The booming construction sector and strong real growth in disposable income were among the factors that helped Ukraine weather the turmoil caused by political developments and ongoing geopolitical instability, according to the report.
4.0​ Real Economy 4.1​ Industrial production
Ukraine's industrial output growth stumbled in October, contracting by 5.0% year-on-year ​after dropping 1.1% y/y in September, the nation's state statistics service Ukrstat reported on November 22.
Seasonally adjusted output declined 2.4% month-on-month. In January-October, industrial output declined 0.6% y/y.
The result is a disappointment as the economy has been recovering from the crash of 2014-15, but GDP growth also fell slightly in the third quarter, slowing to 4.2% from 4.6% in the second quarter. The International Monetary Fund (IMF) team that was in Kyiv last week warned that Ukraine’s economic growth was “too slow” and the government needs to focus on reforms to ensure an acceleration. While the economy has been growing it is still growing below potential given the size of the contraction in the crisis years when GDP shrank 17% in the first quarter of 2015.
Manufacturing output shrank 6.0% y/y in October (after a 1.2% y/y decline in September). In particular, metallurgy output plummeted 19.9% y/y (from a 5.4% y/y slide in September). Machinery production shrank 5.8% y/y (vs. a 3.6% y/y decline in September).
Ukraine’s industry is heavily dependent on metallurgy and iron and steel prices have fallen this year, hurting the sector.
Meanwhile, food production fell 4.3% y/y (vs. a 1.6% y/y increase in September). Mining output declined 3.6% y/y in October, deepening from a 2.2% y/y decline in September. In particular, coal production declined 2.3% y/y, oil and natural gas production slid 2% y/y, and iron ore output fell 4% y/y.
Output in supply of electricity and natural gas slid 4.4% y/y in October (vs. 1% y/y growth in September).
Evgeniya Akhtyrko at Kyiv-based brokerage Concorde Capital describes the situation in Ukraine’s industry as "devastating". "The unfavourable situation on the global market is slaying Ukraine’s metallurgical sector," she added in a note on November 25.
20​ UKRAINE Country Report​ December 201 ​ ​www.intellinews.com