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War Aggravates Economic Problems

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Intensified fighting around Donetsk and Luhansk triggered a 12.1% y/y industrial output slump in July. The Luhansk oblast reported a 56% y/y decline in industrial production, while the Donetsk oblast’s output fell 28.5% y/y that month. In August, military forces intensified their operations, as the Ukrainian Army shut down the last supply lines from Russia to Donetsk. The Kremlin responded by bringing more regular Army squads into the fray, to open a few alternate pathways to Donetsk. As daily reports from the front detail serious destruction, and loss of human life, we should be prepared for a deeper industrial decline in August and September. More about recent tendencies you can read in our new report “War Aggravates Economic Problems”. The full report could be obtained through subscription at Global Source (www.globalsourcepartners.com). Trial access is available.

Summary of Economic Overview

August 26, 2015