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Industrial output decelerates in Ukraine in September

Staff Writer |
Industrial production in Ukraine lost steam in September. According to the State Statistics Service of Ukraine, industrial production rose 2.0% annually, which was below the 3.4% expansion recorded in August.

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The slowdown was driven by a contraction in mining and quarrying output. The trend continued to improve in September, recording the first positive result in nearly four years. Annual average variation in industrial output rose from August’s minus 0.1% to plus 0.5%.

Looking at the regions, the recovery in the eastern area of Luhansk continued and output grew at a double-digit pace. However, production in Donetsk returned to contraction.

Donetsk and Luhansk are Ukraine’s industrial heartland and have been at the center of the conflict between the Ukrainian government and pro-Russian separatist groups.

Sequential data suggested a brighter picture for industrial production. In September, output rose a seasonally-adjusted 4.4%, which contrasted a 0.8% contraction in August.

Following a substantial contraction in 2015, analysts expect Ukraine’s industrial production to recover part of the lost ground this year.

FocusEconomics Consensus Forecast participants project that industrial output will grow 3.0% in 2016, which is up 0.9 percentage points from last month’s forecast.

For 2017, panelists expect industrial production to rise 4.0%, which is up 0.6 percentage points from the previous month’s projection.