Page 25 - UKRRptDec20

4.0​ Real Economy 4.1​ Industrial production
The decline of Ukraine’s industrial output intensified to 5.0% y/y in October from 4.4% y/y in September, the State Statistics Service reported on November 23. ​Seasonally adjusted output slid 0.5% m/m in October. In 10M20, industrial output dropped 6.8% y/y.​ ​Manufacturing output fell 6.6% y/y in October (after a 5.8% y/y decline in September). In particular, the decline in machinery plummeted to 18.6% y/y (vs. 9.1% y/y in September), food production dropped 7.2% y/y (vs. 8.7% y/y in September). At the same time, the decline in metallurgy slowed to 3.3% y/y (vs. 7.6% y/y), chemical production grew 1.9% y/y (vs. 5.8% y/y growth in September).​ ​Mining output declined 2.5% y/y (vs. a 2.8% y/y slide in September). In particular, iron ore production decreased 1.5% y/y, coal production fell 11.8% y/y and oil & gas production dropped 2.0% y/y. The supply of electricity & natural gas slid 1.8% y/y after a 0.2% y/y decline in September.​ R​ egionally, the steepest declines were observed in the Ternopil (-20.2% y/y), Chernivtsi (-17.7% y/y) and Sumy (-13.3% y/y) regions. Industrial output grew the most in the Ukraine-controlled Luhansk (20.3% y/y), Mykolayiv and Kherson (both 12.1% y/y) regions.​ ​The decline in Ukraine’s industry didn’t slow in October mostly due to very weak results in the machinery sector, in, which the output swings a lot from month to month. Meanwhile, the slower decline in metallurgy and continued upswing in chemical production are positive developments. We are likely to see more moderate declines in Ukrainian industry in November-December, given the low comparative base of the previous year. We expect industrial output to drop around 6% y/y in 2020 (vs. a 0.5% y/y decline in 2019).
About 10% of Ukraine’s small and medium businesses are on the verge of bankruptcy due to corona controls​, Dafina Gercheva, resident representative of the United Nations Development Program, estimates in an interview with Interfax-Ukraine. By the end of December, the corona controls and recession will have put more than 9mn people – one quarter of Ukraine’s population -- in financial distress, the UNDP predicts.
25​ UKRAINE Country Report​ December 2020 ​ ​www.intellinews.com