Ukraine manufacturing down, Tymoshenko claims possible turnaround

Mar 16, 2009, 15:57 GMT

Kiev - Manufacturing in the former Soviet republic of Ukraine is down by nearly a third over 2008 indicators, but recent data gives hope an economic turnaround is in sight, Prime Minister Yulia Tymoshenko said Monday.

'Practically in all sectors with the exception of energy we already are registering positive growth, and some industries are up as much as 20 per cent,' she claimed, in comments reported by Interfax.

Tymoshenko's comments came in the wake of new data published by Ukraine's State Statistics Committee showing Ukrainian manufacturing nationwide down 32 per cent as compared to volumes 12 months ago.

Among the worst-hit has been the country's automotive sector, with light vehicle production down 80 per cent and tractor production lines halted completely.

Transportation equipment, machine-building, and construction materials also were badly depressed with drops between 63 and 51 per cent drop over volumes produced in 2008.

Ukraine's metals sector, driven by the economically-critical steel industry, fell 41 per cent over the last 12 months, but improved 10 per cent in February over January volumes.

Slight expansion also was evident in Ukraine's printing, chemical, and plastics industries, which turned in one-month growth of between 12 and 28 per cent, although still well down down volumes one year ago.

Tymoshenko argued the upticks albeit short term proved Ukraine's economy was responding to an economic stimulation package recently passed by her government.

'This doesn't mean that the crisis is over ... but rather that the anti-crisis measures we have enacted as a government are giving some positive benefits. Without doubt, our work is just beginning,' she said.

Geographically Ukraine's most depressed region according to the recent government data are the western Volynsk and Zakarpatia regions, with economic indicators down 63 and 52 per cent over last year. Both provinces' economies are heavily dependant on demand from neighbouring Poland and Hungary for goods and labour.

The smallest drop in Ukraine on a regional basis was in the predominantly rural Sumy and Cherkassy provinces, 9 and 13 per cent. Both provinces are predominantly rural and contain relatively little industry.

Ukraine's worst-ever year economically was 1994, when annual production fell 27 per cent, and the country faced hyperinflation.