Author: Olga SHELKOVA | 27.08.2014
Translated from Russian, by Maria Razdiak
Edited by Ken Griffith and S. Naylor
Original article: http://odnarodyna.com.ua/node/24311
[Olga Shelkova is an independent economic journalist, primarily analysing, the events of the CIS (The Commonwealth of Independent States).]
The published results by the Goskomstat (Federal Bureau of Statistics) of changes to the Ukrainian economy during the first half of 2014 can be shocking. But the most important figures in the situation at hand are not the fact that the GDP fell 4.5% , nor even that the gross domestic product is predicted to fall -7% by the end of the year, but the irreplaceable losses concealed by these frigid statistics—the losses that will destroy the actual possibility of a Ukrainian economic recovery in the future.
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We are speaking primarily about the collapse of the industrial sector, which is accelerating. During the period from January to June, the volumes of industrial production shrank by 5.8%, while July alone brought that sector down by another 12%. The most profound damage was suffered by the coal sector (-28.7%), the automobile production (-23.8%), the chemical manufacture (-22.2%), the oil refining sector (-15.9%), the rubber industry (-13.8%), metallurgy (-12.3%), and furniture production (-12.5%). Clutched by war, the Lugansk and Donetsk regions have lost 56% and 28.5%, respectively, of their industrial potential. The crisis of the component supply from Donbass in turn led to the collapse of the industrial giant of Zaporozhie (ZAZ). This enterprise lowered its production volume by 98.9%, and by October will probably stop all manufacturing, leaving 21,000 workers out of the street.
The industrial potential was also dented by the fall in exports to Russia, which ranged from 25% to 70% over the different sectors. For example, automobile production lost 40% of all exports, metallurgy – 32.6%, agricultural – 37%.
It must be noted that these horrific statistical indicators include the period during which Ukraine had a legitimate government, and economic relationships with Russia were actively developed. With the complete severance of economic ties with the Russian Federation by the Kiev Junta, the pace of industrial collapse will only accelerate.
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The state of the agricultural sector, for which Kiev has great hopes, is no better. The first quarter of 2014 showed a 3.9% decrease in the volume of agricultural productivity, while the amount of produce fell by 17.6%. The fall in plant production during the six months totaled 30.1%. Grain production (not including corn, as the marketing year for such starts and finishes in September) shrunk by 2.1 times (i.e. more than half), winter and spring wheat – 4.8 times, rye – 27.5 times, grain legumes – 2.3 times, rapeseed – by 36.5%, the collection of fruit and berries – 11.8%, cattle livestock – 3.2%.
Specialists predict an estimated a 10% fall in the gross output of grain, which will lower the export potential by 7%; while Ukrainian agriculture by the end of the year may shrink by 10-15%.
Complete story at - Statistics tell the tale: Irreplaceable losses for the Ukrainian economy | SLAVYANGRAD.org
Translated from Russian, by Maria Razdiak
Edited by Ken Griffith and S. Naylor
Original article: http://odnarodyna.com.ua/node/24311
[Olga Shelkova is an independent economic journalist, primarily analysing, the events of the CIS (The Commonwealth of Independent States).]
The published results by the Goskomstat (Federal Bureau of Statistics) of changes to the Ukrainian economy during the first half of 2014 can be shocking. But the most important figures in the situation at hand are not the fact that the GDP fell 4.5% , nor even that the gross domestic product is predicted to fall -7% by the end of the year, but the irreplaceable losses concealed by these frigid statistics—the losses that will destroy the actual possibility of a Ukrainian economic recovery in the future.
********
We are speaking primarily about the collapse of the industrial sector, which is accelerating. During the period from January to June, the volumes of industrial production shrank by 5.8%, while July alone brought that sector down by another 12%. The most profound damage was suffered by the coal sector (-28.7%), the automobile production (-23.8%), the chemical manufacture (-22.2%), the oil refining sector (-15.9%), the rubber industry (-13.8%), metallurgy (-12.3%), and furniture production (-12.5%). Clutched by war, the Lugansk and Donetsk regions have lost 56% and 28.5%, respectively, of their industrial potential. The crisis of the component supply from Donbass in turn led to the collapse of the industrial giant of Zaporozhie (ZAZ). This enterprise lowered its production volume by 98.9%, and by October will probably stop all manufacturing, leaving 21,000 workers out of the street.
The industrial potential was also dented by the fall in exports to Russia, which ranged from 25% to 70% over the different sectors. For example, automobile production lost 40% of all exports, metallurgy – 32.6%, agricultural – 37%.
It must be noted that these horrific statistical indicators include the period during which Ukraine had a legitimate government, and economic relationships with Russia were actively developed. With the complete severance of economic ties with the Russian Federation by the Kiev Junta, the pace of industrial collapse will only accelerate.
********
The state of the agricultural sector, for which Kiev has great hopes, is no better. The first quarter of 2014 showed a 3.9% decrease in the volume of agricultural productivity, while the amount of produce fell by 17.6%. The fall in plant production during the six months totaled 30.1%. Grain production (not including corn, as the marketing year for such starts and finishes in September) shrunk by 2.1 times (i.e. more than half), winter and spring wheat – 4.8 times, rye – 27.5 times, grain legumes – 2.3 times, rapeseed – by 36.5%, the collection of fruit and berries – 11.8%, cattle livestock – 3.2%.
Specialists predict an estimated a 10% fall in the gross output of grain, which will lower the export potential by 7%; while Ukrainian agriculture by the end of the year may shrink by 10-15%.
Complete story at - Statistics tell the tale: Irreplaceable losses for the Ukrainian economy | SLAVYANGRAD.org
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