Ukraine Economy Profile 2009

Economy - overview

After Russia, the Ukrainian republic was far and away the most important economic component of the former Soviet Union, producing about four times the output of the next-ranking republic. Its fertile black soil generated more than one-fourth of Soviet agricultural output, and its farms provided substantial quantities of meat, milk, grain, and vegetables to other republics. Likewise, its diversified heavy industry supplied the unique equipment (for example, large diameter pipes) and raw materials to industrial and mining sites (vertical drilling apparatus) in other regions of the former USSR. Shortly after independence was ratified in December 1991, the Ukrainian Government liberalized most prices and erected a legal framework for privatization, but widespread resistance to reform within the government and the legislature soon stalled reform efforts and led to some backtracking. Output by 1999 had fallen to less than 40% of the 1991 level. Ukraine's dependence on Russia for energy supplies and the lack of significant structural reform have made the Ukrainian economy vulnerable to external shocks. Ukraine depends on imports to meet about three-fourths of its annual oil and natural gas requirements. Ukraine concluded a deal with Russia in January 2006 that almost doubled the price Ukraine pays for Russian gas. Disputes with Russia over pricing have led to periodic gas cut-offs. Outside institutions - particularly the IMF - have encouraged Ukraine to quicken the pace and scope of reforms. Ukrainian Government officials eliminated most tax and customs privileges in a March 2005 budget law, bringing more economic activity out of Ukraine's large shadow economy, but more improvements are needed, including fighting corruption, developing capital markets, and improving the legislative framework. Ukraine's economy was buoyant despite political turmoil between the prime minister and president until mid-2008. Real GDP growth exceeded 7% in 2006-07, fueled by high global prices for steel - Ukraine's top export - and by strong domestic consumption, spurred by rising pensions and wages. The drop in steel prices and Ukraine's exposure to the global financial crisis due to aggressive foreign borrowing has lowered growth in 2008 and the economy probably will contract in 2009. Ukraine reached an agreement with the IMF for a $16.5 billion standby arrangement in November 2008 to deal with the economic crisis. However, political turmoil in Ukraine as well as deteriorating external conditions are likely to hamper efforts for economic recovery.

GDP (purchasing power parity)

$339.8 billion (2008 est.)
$330.9 billion (2007 est.)
$306.6 billion (2006 est.)
note: data are in 2008 US dollars

GDP (official exchange rate)

$179.7 billion (2008 est.)

GDP - real growth rate

2.7% (2008 est.)
7.9% (2007 est.)
7.3% (2006 est.)

GDP - per capita (PPP)

$7,400 (2008 est.)
$7,100 (2007 est.)
$6,600 (2006 est.)
note: data are in 2008 US dollars

GDP - composition by sector

agriculture: 9.3%
industry: 31.7%
services: 58.9% (2008 est.)

Population below poverty line

37.7% (2003)

Labor force

21.57 million (2008 est.)

Labor force - by occupation

agriculture: 19.4%
industry: 24.2%
services: 56.4% (2005)

Unemployment rate

3% (2008 est.)
2.3% (2007 est.)
note: officially registered; large number of unregistered or underemployed workers

Household income or consumption by percentage share

lowest 10%: 3.4%
highest 10%: 25.7% (2006)

Distribution of family income - Gini index

31 (2006)
29 (1999)

Investment (gross fixed)

27.2% of GDP (2008 est.)

Budget

revenues: $56.55 billion
expenditures: $59.24 billion; note - this is the planned, consolidated budget (2008 est.)

Public debt

10.3% of GDP (2008 est.)
24.7% of GDP (2004 est.)

Inflation rate (consumer prices)

25.2% (2008 est.)
12.8% (2007 est.)

Central bank discount rate

12% (31 December 2008)
8% (31 December 2007)

Commercial bank prime lending rate

11.68% (31 December 2008)
11.33% (31 December 2007)

Stock of money

$29.24 billion (31 December 2008)
$35.97 billion (31 December 2007)

Stock of quasi money

$37.32 billion (31 December 2008)
$41.51 billion (31 December 2007)

Stock of domestic credit

$101.1 billion (31 December 2008)
$87.13 billion (31 December 2007)

Industries

coal, electric power, ferrous and nonferrous metals, machinery and transport equipment, chemicals, food processing (especially sugar)

Industrial production growth rate

-5% (2008 est.)

Electricity - production

182.4 billion kWh (2006 est.)

Electricity - production by source

fossil fuel: 48.6%
hydro: 7.9%
nuclear: 43.5%
other: 0% (2001)

Electricity - consumption

148.1 billion kWh (2006 est.)

Electricity - exports

12.52 billion kWh (2006 est.)

Electricity - imports

2.082 billion kWh (2006 est.)

Oil - production

102,400 bbl/day (2007 est.)

Oil - consumption

344,000 bbl/day (2006 est.)

Oil - imports

441,200 bbl/day (2005)

Oil - exports

190,500 bbl/day (2005)

Oil - proved reserves

395 million bbl (1 January 2008 est.)

Natural gas - production

21.05 billion cu m (2008 est.)

Natural gas - consumption

66.32 billion cu m (2008 est.)

Natural gas - exports

4 billion cu m (2006 est.)

Natural gas - imports

65.4 billion cu m (2007 est.)

Natural gas - proved reserves

1.104 trillion cu m (1 January 2008 est.)

Current Account Balance

-$12.93 billion (2008 est.)
-$5.918 billion (2007 est.)

Agriculture - products

grain, sugar beets, sunflower seeds, vegetables; beef, milk

Exports

$67.72 billion (2008 est.)
$49.84 billion (2007 est.)

Exports - commodities

ferrous and nonferrous metals, fuel and petroleum products, chemicals, machinery and transport equipment, food products

Exports - partners

Russia 23.3%, Turkey 8.2%, Italy 5% (2008)

Imports

$84.65 billion (2008 est.)
$60.41 billion (2007 est.)

Imports - commodities

energy, machinery and equipment, chemicals

Imports - partners

Russia 27.4%, Germany 10.5%, China 8.6%, Poland 7.1%, Turkmenistan 4.7% (2008)

Reserves of foreign exchange and gold

$31.54 billion (31 December 2008 est.)
$32.48 billion (31 December 2007 est.)

Debt - external

$101.7 billion (31 December 2008)
$79.96 billion (31 December 2007)

Stock of direct foreign investment - at home

$41.77 billion (31 December 2008 est.)
$31.08 billion (31 December 2007 est.)

Stock of direct foreign investment - abroad

$1.905 billion (31 December 2008 est.)
$895 million (31 December 2007 est.)

Market value of publicly traded shares

$24.36 billion (31 December 2008)
$111.8 billion (31 December 2007)
$42.87 billion (31 December 2006)

Economic aid - recipient

$409.6 million (1995); IMF Extended Funds Facility $2.2 billion (2005)

Currency (code)

hryvnia (UAH)

Currency (code)

UAH

Exchange rates

hryvnia (UAH) per US dollar - 4.9523 (2008 est.), 5.05 (2007), 5.05 (2006), 5.1247 (2005), 5.3192 (2004)

Fiscal year

calendar year