December steel production slumped 42.7 percent, chemical output fell 40 percent, and machine building dropped 37.1 percent. The annual contraction rate slowed slightly in December, but this may be a partly a statistical artefact due to what is know as the "low base effect" in December 2007, however output was up by 3.2% in December over November, which may be a result of the sharp drop in the value of the hryvnia. I would be surprised if we didn't see further falls in output, but we will need to wait and see what happens in the coming months.
For a full analysis of what is happening in Ukraine, see my As The Politicians Battle It Out Ukraine's Economy Tunnels South In Search Of Australia
