Review of the economy of Ukraine

In May 2012, there was observed economic recovery in Ukraine by all economic activities. Like in previous months, high internal consumer demand was a key factor of the economic growth.

In January – May, the growth rates of production index of staple industries made up 2.2% against 1.8% in January – April. It resulted from the upward dynamics of industries oriented to domestic consumer demand viz. retail trade, construction, and food industry.

In May 2012, retail trade made the most considerable impact on the increase in the production index of staple industries. From the beginning of the year, the growth rates of its turnover made up 15.5%. A growth in the real wage of the population was one of factors causing the increase (during the 5 months of the reporting year, the real wage grew by 15.5%).

In May 2012, construction indicators considerably improved. The decrease in construction volumes being observed from February changed into their increase (in January – May, by 0.3%). It was caused by the enlargement of government financing (in January – May 2012 as compared to the respective period of 2011, capital expenditures of the Consolidated Budget grew by 55.4%) and favorable weather conditions for construction works.

In May, the growth rates of industrial production remained at the level of the previous month, making up 0.7% in January – May. The year on year growth rates of industrial production grew to 1.0%. Chemical and petrochemical industry production grew most of all; its year on year growth rates made up 14.9% chiefly owing to high external demand for mineral fertilizers.

Positive changes were also observed in food industry. The year on year growth rates of its production made up 3.0% (in April, the 2.1% fall). Indicators of production of food products, beverages, and tobacco goods improved at the expense of high consumer demand. The resumption of cheese deliveries to Russia also contributed to the growth of food industry production.

A sharp increase in export deliveries of electric power (within January – May 2012 against the respective period of 2011, by 66.1%) entailed a rise in the year on year growth rates of production of electric power, gas, and water to 5.8% (in April, they fell by 3.3%).

At the same time, weak external demand made a negative impact on the dynamics of export oriented industries; as compared to the respective period of the previous year, machine building  production grew by only 0.5%, whereas metallurgy industry production reduced by 1.1%.

In January – May 2012 versus the respective period of 2011, the growth rates of agricultural output made up 1.5%. It was chiefly at the expense of crop industry, because substantial areas of frozen winter crops and permanent grasses were resowed. According to State Statistics Service of Ukraine data, as of 1 June 2012, the area sown to spring crops by agricultural enterprises of all categories totaled 19.3 million hectares, which was 10.8% as much as at the respective date of the previous year.