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Ukraine's industrial output may surge 10.7% in Q1

Ukraine's industrial production probably soared 10.7% in the first three months of the year, led by growth in the machine-building and food industries, the Economy Ministry said.

Output in the Q1 will surpass the ministry's earlier forecast of 7.3%, the ministry said in a statement on its Web site. Industrial output grew 0.2% in the same period a year ago after Russia doubled the price for natural gas it sells to Ukraine in January 2006. „Machine-building and food production growth will determine the increase in industrial output, which will make up more than half of the increase,” the Economy Ministry said. „Steel and chemical output will depend on world demand.” Ukraine's industrial output accelerated 6.2% in 2006, double the pace of the previous year, helped by steel and machinery production. That helped economic growth accelerate up to 7% in 2006. The government and international organizations including the World Bank initially forecast growth of 2.5% following the gas price increase. Annual machinery production will advance 20% in the Q1 amid strong demand both domestically and abroad, including in Russia, the ministry said. Annual food production will increase 13% in the same period after Russia lifts a ban on Ukrainian meat and dairy products imposed last year, the ministry said. The ministry also said it expects Ukrainians to consume more food. Ukraine's steel and chemicals production will grow 10% in the first three months of they year, compared with the same period a year ago, the ministry said. Steel and chemical products make up more than 50% of Ukrainian exports. Industrial output rose 3.1% in 2005, compared with 12.5% in 2004, according to the state statistics committee. (Bloomberg)