Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Ukraine's Output Falls By a Third

KIEV -- Ukrainian industrial output shrank by more than one-third in January compared with a year earlier, data showed Tuesday, the worst drop in more than a decade.

Output fell sharply year on year in January in everything but oil refining, data from the state statistics committee showed. In total, it fell 34.1 percent year on year and 16.1 percent month on month.

Ukraine has been hit hard by falling global demand and declining prices for steel, a key export, as well as a squeeze on lending and a weakened currency, which has destabilized the banking system.

Political turmoil has delayed anti-crisis measures and now threatens a $16.4 billion loan from the International Monetary Fund. The IMF failed to agree last week on disbursing a second, much-needed tranche.

The parliament on Tuesday accepted the resignation of Finance Minister Viktor Pynzenyk, a veteran economic reformer who quit after a protracted dispute with Prime Minister Yulia Tymoshenko over high budget spending and a deficit.

The planned budget shortfall would be in violation of the agreement with the IMF, which has stressed the need for strong crisis management. Uncertainty over the next tranche led Fitch to downgrade Ukraine's rating.

Chemical and petrochemical production shrank by almost 50 percent. Much of the industry ground to a halt last month when Russia cut gas supplies to Ukraine over a pricing dispute.

Machine building and mineral production both contracted by more than half, year on year.

Tens of thousands of workers have been put on unpaid leave by the industry, and many have taken out dollar-denominated loans to pay for cars and homes -- only to see their repayments soar as the hryvna weakened.

That, as well as deposit withdrawals, has shaken up the banking sector. Seven banks have been placed in receivership, including the country's fifth- and seventh-largest.