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.

Review of the world economy

In May 2012, the growth rates of the world economy slowed down. The state of economies of Euro area countries continued to deteriorate; the economic growth of the BRIC countries slowed down. The weak labor market continued to affect the inflation dynamics. Besides, there was observed a fall in energy resources prices on world goods markets.

In May 2012, the world economy continued to grow. A certain deceleration in the growth rates of industry was compensated by a faster increase in the growth rates of services sphere. In May, the global composite index JPMorgan PMI* made up 52.1 as compared to 52.3 in March. The speeding-up growth rates of the U.S. economy affected the development of the world economy. In May, production volumes of both industry and services showed an increase. The growth in economies of Russia, China, and India continued. At the same time, the world economy development was restrained by slowing down economic growth rates of Euro area countries and Brazil.

In May 2012, an increase in world industrial production was accompanied by a decrease in inflation pressure. The global employment rate increased in the countries whose economic dynamics were positive.