Review of the economy of Ukraine, January 2015

12 Mar 2015

In January 2015, the economic situation in Ukraine continued to worsen. A reduction in industrial produc- tion speeded up, the dynamics of agricultural and construction indicators were descending. Population's purchasing power worsened, having caused a considerable decline in the retail trade turnover. Within the reporting month, the dynamics of banks' transactions with corporations' deposits and loans were formed under the influence of a seasonal factor. The dynamics were also determined by the current situation on goods markets, changes in prices and the exchange rate of the hryvnia, and reorientation of flows of cor- porations' funds due to suspension of activities of certain enterprises and complicated logistics at the expense of the situation in the east of the country.

Versus January 2014, a decline in industrial production volumes accelerated to 21.3%3  (in December 2014,

17.1%). Such dynamics of the industry's work were caused by the further reduction in the year on year pro- duction volumes of machine building (down by 32.5%), mining and quarrying (down by 24.1%), and chem- ical industry (down by 21.6%). The dynamics of production of other industries were also descending.

Against the background of a decrease in production volumes, balances of deposits of corporations engaged in mining industry decreased by 0.1% (out of them, national currency deposits with original matu- rity up to 1 year went down by 22.9%), while balances of loans of the industry were reduced by 1.1%. Balances of foreign currency deposits of corporations engaged in metallurgical production decreased by

14.1% despite an increase in the credit backing (in particular, loans with original maturity over 1 year and up to 5 years) of the corporations by banks. Short-term national currency deposits of metallurgical corpo- rations were reduced, and funds were introduced in circulation. On the contrary, balances of demand deposits grew, up by 60.4%. Deposits of corporations engaged in chemical production showed a similar trend. Within January, the credit backing of corporations engaged in production of foodstuffs and bever- ages grew (up by 1.0% and 2.0%, correspondingly).

In January 2015, supply of electric power, gas, steam, and conditioned air decreased by 17.2% due to a reduction in production of electric power by heat power plants, which was caused by the relatively warm weather and difficulties with coal production in the east of the country. The reduction in receipts in accounts of the corporations engaged in the mentioned industry caused a 14.1% decline in balances of their deposits (out of them, national currency deposits with original maturity up to 1 year fell by 46.6%), an increase in the need for loans, and a 1.7% growth in balances of debts on loans (out of them, national cur- rency loans with original maturity over 1 year and up to 5 years went up by 8.7%).

Source: Bulletin of the National Bank of Ukraine       

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