Trade — in the first six months showed an increase.
The current coronaries-scale destructive effect on the economy compared to the great depression. The Minister of Finance, Sergei Marchenko said that Ukraine is already out of the crisis. But experts, not knowing how can last pandemic, and gave vague predictions about, how long the problem greatly affected the welfare of the people etc. Now there are first results: ended the half, began to appear in the statistics, and the situation can be predicted more accurately. Published such data and Ukrstat. Overall, the picture is not entirely clear.
For six months the water transport carried zero passengers
According to the state statistics service, industrial production in the first half decreased by 8.3% compared to the same period last year. Most affected the production of investment goods (those produced at the expense of investment). It was released only 75,6% from 2019. Also significantly reduced the production of consumer durable goods (furniture, appliances, etc.) – 14.6%. But the goods short-term use (including foodstuffs) – only 2%.
Speaking of individual industries, the most affected of the processing industry to minus 9.6 percent from the level of the first half of 2019. In particular, the production of vehicles decreased to 69,2%, electronics – to 74.3%. The mining industry declined by 6.3%, including coal – 24%, extraction of metal ores – 5,9%.
One of the most affected industries was the transport. In January-June 2020 freight transport decreased by 20% compared to the first half of 2019, and passenger transportation by half. State statistics service has estimated that the passenger transport services for the six months of this year were used by 44% of Ukrainians less than in 2019. In particular, absolutely did not work, water transport (0%), air worked only one-third from last year (33%). But the busiest was the trams – 64.2% from the same period of 2019.
The construction, which in any country is considered one of the engines of the economy, Ukraine also fell. The volume of construction works in the first half decreased by 7.1%, compared to the same period last year. At the same time most stalled construction of residential buildings is performed only 81,7% of the work volume of the first half of 2019.
It would seem that the reduction of industrial production or construction by 8% – the figures are not critical. About the same – 7.7 percent – industrial production declined at the end of 2019, when coronaries still did not exist. However, experts note that the most affected sectors that offer the greatest growth of GDP and export earnings.
“The industry has significantly dropped due to the quarantine in April and may. In June started to recover, but very weak. Moreover, in addition to the quarantine, our industry was affected by the global crisis. Demand for the metal fell. But the most significant shaft was in mechanical engineering. It is connected primarily with the fact that most of the contracts were suspended. Sorry, fell coal mining, mining. And absolutely failed services. Therefore, for the second quarter GDP decline is likely to be about 10%. This means that the economy has lost a lot,” says President of the Ukrainian analytical center Alexander Okhrimenko.
Experts also pay attention that before the crisis, many sectors showed a considerable increase. This means to understand how they are affected by the crisis, it is necessary to summarize the percentage drop and percentage of lost growth. For example, in the construction in the first half of 2019, compared with 2018, the amount of work increased by 30%. That is to say that in fact the construction has slowed down, relatively speaking, almost 40%. And it is not delivered on time objects, the absence of earnings from the tens of thousands of people and the lack of development in related industries.
Ukrainians bought even more than last year. How is that possible?
Trade surprisingly little affected by the crisis. Despite the fact that in March-April were closed many outlets, found that sales for the half year did not decrease, but even increased. According to the state statistics service, retail turnover increased by 3% compared to the same period last year, though wholesale turnover amounted to 99.5% of the previous year.
And here are the results of foreign trade worse. For the first five months of this year exports amounted to 93.5% compared to the same period last year, import of goods delivered to 14.5%.
Experts attribute such positive trading results from the fact that a large share of the costs of the Ukrainians goes on food. And they are not very good to give up even in crisis.
“Trade has really grown on 3%, but a year ago was an increase of 10%. Of course, reduction of food did not happen. And the production of, for example, meat, and vegetable oil increased. Because quarantined people will still eat. But sales of clothing fell. Because the purchase of clothing people put off for later. The same applies to furniture, construction materials, etc. Because people have run out of money”, – says Alexander Okhrimenko.
Economic expert Boris Kushniruk warns: in the long term and trade may show a negative result.
“The overall situation is quite complicated, if not to say very bad. The decline in production by 8.3%, the decline of agriculture by 20%, drop transport is very significant, construction, etc. i.e. all indicators except trade, the fall happened. On trade, we do not see the fall, although the observed reduction of growth. This is due to the fact that a significant share of the costs of Ukrainians are food. Here, a significant reduction can not be. But it can change the structure of consumption. Instead of the more expensive, higher quality goods, people can begin to consume cheaper and less quality. But in statistics we do not see. In addition, there was a fall in the price of fuel, utilities, and by reducing these costs, people were able to spend more on food. But we are now falling incomes, there is a reduction of remittances from migrant workers, who constitute a significant share of consumption. Therefore, in the future, most likely we will see a decline in trade,” – said Boris Kushniruk.
When glimmer out of the crisis
After stringent restrictive measures, the economic situation began to improve. For example, in June the industrial production, compared to may, increased by 3,4%, including durable goods – from 34.2%. Nevertheless, experts believe that talking about the beginning of the exit from the crisis yet.
“If we compare the situation of April-may, we see that the economy began to grow. So such a deep fall, as it was in the spring, at the end of the year will be. In the summer played a role, and the fact that the vast majority of people who previously went to rest abroad, are now forced to the rest in Ukraine. Accordingly, they spend money in Ukraine – as they say, there would be no happiness, Yes the misfortune has helped. It also slightly improves the situation, and in some positions it may be even better than last year. In General, I can say that the situation will gradually stabilize relative to the spring months. But there are risks of the second wave and the reaction of the European authorities on her. Unfortunately, we can not guarantee that will not return the quarantine restrictions. Western experts and Western business does not expect any significant recovery before 2022. So next year is likely to go to the accompaniment of quarantine restrictions in the movement of investment activity, etc. Thus, it is clear that the fall will be, and it will be more than predicted by our government. If it is 6%, predicts the national Bank is now, I’m going to assume that this is not the worst situation”, – said Boris Kushniruk.
Alexander Okhrimenko believes that the beginning of the exit from the crisis are not yet available. However, the expert does not exclude that in the fourth quarter of Ukrainians will begin to feel changes for the better.
“Now has not yet begun exit from quarantine. We are in crisis. And in the third quarter, most likely, no significant changes will not happen: summer, the quarantine continues. But there is little hope that in the fourth quarter we will see the growth of industry, compared to the first half. And perhaps, more or less incomes begin to rise, real wages, etc. That is a glimmer of hope that the fourth quarter will be more or less positive,” – says Alexander Okhrimenko.