3Q 2014 fixed investments hit a record low

3Q 2014 fixed investments hit a record low



25 листопада 2014 года
ICU

In its quarterly report on fixed investments for January-September 2014, the State Statistics Office announced that investments over the nine-month period declined by 27.0% to UAH135.5bn versus an 18.9% decline to UAH167.0bn during the same period last year. The Donetsk and Lugansk oblasts, both of which have been affected by war and account for 9.5% and 2.9% of the total, fell most significantly, down 49.2% and 51.2%, respectively (each declined 45% in nominal terms). However, investment contraction was widespread with only two western oblasts - Ivano-Frankivsk and Khmelnytsk - posting growth of 26.9% and 10.0%, respectively. Nine-month investment activity showed an economy-wide contraction across all sectors: the industrial sector, with the largest share of 40.6%, fell 25.4%; the transportation sector was down 27.1%; and the telecom sector declined 22.1%.. The seasonally-adjusted CPI quarterly volume of investments in 3Q 2014 hit the lowest point seen since this statistical data began to be reported in 1Q 2006. According to our calculations, 3Q volume of investments declined 11.1% from the previous quarter and 32.6% YoY. Overall, investments have consistently declined quarter-on-quarter from 4Q 2013 through 3Q 2014 (see charts below). We expect declines to continue, albeit at a slower pace, but still resulting in extended contraction. Although 2H 2014 appears to mark the low point of investment activity in Ukraine over the past 10 years, this contraction is expected to end in 2015 as the new government shows economic results as it contains militarist Russia and follows the IMF program.

Источник: ICU

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