Production index in Ukraine up 1.8% y/y in July. In July, the production index (an indicator similar to GDP) in primary industries grew by 1.8% y/y, after the June increase of 0.9%, May fall of 7.6%, April decline of 1.3% and March fall of 4.0%, the National Bank of Ukraine (NBU) has announced. In Jan-Jul, the index decreased by 0.7% ytd.

Positive drivers of economic dynamics in July were: high cereals harvest; growth of external demand; Ukrainian food producers mastering new market outlets; and retaining high domestic demand. The significant increase in grain crops yield this year (by 20.9% y/y) helped agricultural production volumes to grow fast-pace (14.8% y/y in Jan-Jul).

Metallurgy production volumes grew by 1.6% y/y in July, for first time since June 2012, specifically daily average output of steel rose 10.2% y/y, of cast iron 8.3%, herewith, excluding the seasonal factor, metallurgy output grew 4.5% in July. The steelmaking industry's raised demand for raw stock facilitated deceleration of the plunge of production volumes in the mining industry: from minus 1.6% y/y in June to minus 0.9% y/y in July.

Production volumes in separate machine-building categories rose in July: electrical equipment (by 2.5% year on year) and machines and equipment not included in all other categories (1.8%). As a result of restoration of external demand, deceleration of industrial production cutback was observed in July, to 4.9% y/y.

Improvement of the industrial production dynamics led to a slow-down in the lowering of cargo transportation volumes to 1.7% in July year on year (minus 3.4% in June). The central bank believes that the constraining factor of the sector development was Russia's restriction of imports of some of the Ukrainian goods and toughening customs procedures in late July.

Lasting ascent of real income of the population on the background of lowering of interest rates on loans contribute to increase in volume credits for acquisition, construction and reconstruction real property in the first half-year by 72.7%.

Volumes of construction of apartment houses increased by 4.6% y/y, their portion in the total quantity of construction works grew to 18% (15.9% in January).

Growth of actual wages amid price stability incited a gain of retail sales in July, 7.7% y/y, and for Jan-Jul such gain made 10.6% y/y.

The NBU underlines, current August tendencies testify to further invigoration of external demand on the background of preservation of high level of domestic demand.