Ukraine Economy Profile 2008

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. A dispute with Russia over pricing in late 2005 and early 2006 led to a temporary gas cut-off; Ukraine concluded a deal with Russia in January 2006 that almost doubled the price Ukraine pays for Russian gas. 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 remains buoyant despite political turmoil between the Prime Minister and President. Real GDP growth reached about 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. Although the economy is likely to expand in 2008, long-term growth could be threatened by the government's plans to reinstate tax, trade, and customs privileges and to maintain restrictive grain export quotas.

GDP (purchasing power parity)

$321.3 billion (2007 est.)

GDP (official exchange rate)

$131.2 billion (2007 est.)

GDP - real growth rate

6.9% (2007 est.)

GDP - per capita (PPP)

$6,900 (2007 est.)

GDP - composition by sector

agriculture: 9.2%
industry: 32.6%
services: 58.2% (2007 est.)

Population below poverty line

37.7% (2003)

Household income or consumption by percentage share

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

Inflation rate (consumer prices)

11.3% (2007 est.)

Investment (gross fixed)

22.6% of GDP (2007 est.)

Labor force

21.63 million (2007 est.)

Labor force - by occupation

agriculture: 25%
industry: 20%
services: 55% (1996)

Unemployment rate

2.5% officially registered; large number of unregistered or underemployed workers; the International Labor Organization calculates that Ukraine's real unemployment level is nearly 7% (2007 est.)

Distribution of family income - Gini index

31 (2006)

Budget

revenues: $44.63 billion
expenditures: $46.98 billion; note - this is the planned, consolidated budget (2007 est.)

Public debt

12.4% of GDP (2007 est.)

Industries

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

Industrial production growth rate

6% (2007 est.)

Electricity - production

192.1 billion kWh (2006)

Electricity - consumption

181.9 billion kWh (2006)

Electricity - exports

10.07 billion kWh (2005)

Electricity - imports

20 billion kWh (2006)

Oil - production

90,400 bbl/day (2006)

Oil - consumption

284,600 bbl/day (2006)

Oil - imports

469,600 bbl/day (2004)

Oil - exports

214,600 bbl/day (2004)

Oil - proved reserves

395 million bbl (1 January 2006 est.)

Natural gas - production

20.85 billion cu m (2006 est.)

Natural gas - consumption

73.94 billion cu m (2006 est.)

Natural gas - exports

4 billion cu m (2006 est.)

Natural gas - imports

57.09 billion cu m (2006 est.)

Natural gas - proved reserves

1.075 trillion cu m (1 January 2006 est.)

Current Account Balance

-$3.89 billion (2007 est.)

Agriculture - products

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

Exports

$46.68 billion (2007 est.)

Exports - commodities

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

Exports - partners

Russia 21.3%, Turkey 7.1%, Italy 6.4%, US 4.1% (2006)

Imports

$54.3 billion (2007 est.)

Imports - commodities

energy, machinery and equipment, chemicals

Imports - partners

Russia 28.2%, Germany 11.7%, Poland 7.6%, China 7%, Turkmenistan 5.7% (2006)

Reserves of foreign exchange and gold

$28.52 billion (31 December 2007 est.)

Debt - external

$65.38 billion (30 June 2007)

Stock of direct foreign investment - at home

$21.19 billion (2006 est.)

Stock of direct foreign investment - abroad

$222 million (2006 est.)

Market value of publicly traded shares

$42.87 billion (2006)

Economic aid - recipient

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

Currency (code)

hryvnia (UAH)

Exchange rates

hryvnia per US dollar - 5.05 (2007), 5.05 (2006), 5.1247 (2005), 5.3192 (2004), 5.3327 (2003)

Fiscal year

calendar year