A further deterioration in foreign economic conditions, coupled with a high comparison basis of the previous year and adverse weather conditions brought about a decline in economic activity. However, all the components of the production index of basic industries demonstrated growth in January. Overall, the production index of basic industries increased by 3.1% year-on-year.

In January 2012, the Ukrainian economy continued to operate in the context of low external demand and high domestic demand.

Owing to high growth rates of real wages, domestic demand remained at the high level of the previous year, as evidenced by a year-on-year increase of 13.8% in retail trade turnover in January. Volumes of services rendered climbed by 19.3% in January.

Stable government funding was a key driver behind an upward trend in the volume of construction works, which showed a year-on-year rise of 2.5% in January in spite of adverse weather conditions.

Unusual low temperature, on the one hand, contributed to an increase in the production and distribution of electric power, gas and water (3.4% year-on-year) and respectively mining industry (3%). On the other hand, it brought some industries and transport to a halt. In particular, freight shipment dropped by 1% in January.

Low external demand resulted in a fall in the output of metallurgy industry, which declined for a third consecutive month (on a year-on-year basis:  -1.4% in November, -4.7% in December, 1.6% in January). A decline in the output of metallurgy industry can also be attributed to a high comparison basis of the previous.

According to estimates made by the Department, year-on-year GDP growth stood at 2% in 2011.