Ukraine's macroeconomics

Statistics Ministry report shows slowdown in industrial decline

by Sasha Oleksandriv
Intelnews Business Journal

KYIV - Ukraine's industrial decline slowed to 5.1 percent in 1996, down from 12.7 percent in 1995, according to the Statistics Ministry's final 1996 macroeconomics report. The report does not includes figures reflecting the shadow (or unofficial) economy.

Industrial output

Industrial output in December 1996 alone due to seasonable cycle was 3.3 percent lower than in November 1996, and 5.1 percent lower than in December 1995.

Within industrial sectors, the energy and housing materials industries fared worst of all. About 70.3 million tons of coal, Ukraine's main domestic energy source, were extracted in 1996, 16.0 percent less than 1995. Coke coal extraction in the same period was 26.7 million tons, 9.4 percent less than in 1995. Ukraine's electricity generation declined 5.7 percent to 181 billion kilowatt- hours in 1996. Oil processing dropped 20.1 percent: fuel oil production dropped 22.9 percent, the output of gasoline decreased 5.1 percent, and output of diesel fuel dropped 9.9 percent.

The disappointing oil processing results are strange because oil extraction in Ukraine - 4.1 million tons - actually increased 0.2 percent over 1995. Natural gas extraction also increased some 1.4 percent to 18.4 billion cubic meters.

The construction materials industry decreased output of cement to 5.04 million tons in 1996, down 33.8 percent. Brick production declined 35.7 percent to 2.10 billion bricks in this period.

Ukraine's 1996 steel production rose 0.1 percent from 1995 to 22.33 million tons. Rolled metal output rose 2.7 percent to 17.05 million tons, and steel pipe production increased 25.6 percent to 2.001 million tons.

Consumer goods production

Ukraine produced 22.3 billion worth of consumer goods in 1996, down 20.2 percent or 5.6 billion hryvni from the same period of 1995. Total retail sales in 1996 totaled 15.69 billion hrv, down 11.4 percent from 1995.

Ukrainian-made clothing and electronics continued to nosedive. Production of fabric decreased 35.3 percent to 109.3 million square meters, knitted garments tumbled 52.7 percent to 12.0 million items, and footwear production fell 37.5 percent to 12.4 million pairs.

The production of televisions declined 52.6 percent to 114,900 units, including 29,100 color TVs; tape recorder production declined 58.4 percent to 43,700 units; refrigerator production decreased 22.3 percent to 430,600 units; washing machine output decreased 32.6 percent to 144,500 units, and radio production fell 61.9 percent to 46,800 units.

Inflation

As has been reported worldwide, 1996 was the year that Ukraine wrestled inflation under control.

Wholesale prices for industrial goods rose 17.3 percent in 1996, but 12.5 percent of that growth was in the first six months, slowing to 4.3 percent in the second half of 1996. According to the Statistics Ministry, wholesale prices rose just 0.9 percent in December 1996

Specifically, wholesale food prices increased 4.0 percent last year. Electricity prices, however, surged 14.3 percent in the 1996 annual period and 1.9 percent in December versus November 1996, due to a phasing out of subsidies.

Machinery products increased 27.8 percent in 1996 (0.9 percent in December). Lumber, wood and pulp products increased 24.1 percent (0.2 percent in December). Construction materials increased 22.0 percent (0.1 percent in December). Light industry goods increased 17.5 percent, (falling 0.1 percent in December). Ferrous metals increased 11.8 percent, (increasing 2.0 percent in December). Fuel prices increased 8.1 percent (unchanged in December).

Inflation on the consumer market decreased to 0.9 percent in December, down from 1.2 percent in November, 1.5 percent in October, and 2.0 percent in September. Preliminary data on January consumer prices, however, showed a marked increase of over 2 percent in the month.

Copyright © The Ukrainian Weekly, March 9, 1997, No. 10, Vol. LXV

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