Ukraine: Economy#
After Russia, the Ukrainian republic was 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 unique equipment, such as, large diameter pipes and vertical drilling apparatus, and raw materials to industrial and mining sites in other regions of the former USSR.Shortly after independence in August 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. Outside institutions - particularly the IMF –encouraged Ukraine to quicken the pace and scope of reforms to foster economic growth. 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. From 2000 until mid-2008, Ukraine's economy was buoyant despite political turmoil between the prime minister and president.
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 and 100% of its nuclear fuel needs. In January 2009, after a two-week dispute that saw gas supplies cut off to Europe, Ukraine agreed to 10-year gas supply and transit contracts with Russia that brought gas prices to "world" levels. The strict terms of the contracts further hobbled Ukraine's cash-strapped state gas company, Naftohaz. The economy contracted nearly 15% in 2009, among the worst economic performances in the world. In April 2010, Ukraine negotiated a price discount on Russian gas imports in exchange for extending Russia's lease on its naval base in Crimea.
Ukraine’s oligarch-dominated economy grew slowly from 2010 to 2014. After former President YANUKOVYCH fled the country during the Revolution of Dignity, the international community began efforts to stabilize the Ukrainian economy, including a March 2014 IMF assistance package of $14-18 billion. Ukraine has made significant progress on reforms designed to make the country a prosperous, democratic, and transparent country.
Russia’s occupation of Crimea in March 2014 and on-going aggression in eastern Ukraine have hurt economic growth. With the loss of a major portion of Ukraine’s heavy industry in Donbas and ongoing violence, Ukraine’s economy contracted by 6.8% in 2014 and by an estimated 10.5% in 2015. Ukraine and Russia have engaged in a trade war with sharply reduced trade between the countries by the end of 2015. The EU-Ukraine Deep and Comprehensive Free Trade Area finally started up on 1 January 2016, and is expected to help Ukraine integrate its economy with Europe by opening up markets and harmonizing regulations.
Economic Facts#
| GDP (purchasing power parity) | $349.8 billion (2016 est.) $344.6 billion (2015 est.) $382.4 billion (2014 est.) note: data are in 2016 dollars |
|---|---|
| GDP (official exchange rate) | $87.2 billion (2015 est.) |
| GDP - real growth rate | 1.5% (2016 est.) -9.9% (2015 est.) -6.6% (2014 est.) |
| GDP - per capita (PPP) | $8,200 (2016 est.) $8,100 (2015 est.) $8,900 (2014 est.) note: data are in 2016 dollars |
| Gross national saving | 14.3% of GDP (2016 est.) 15% of GDP (2015 est.) 9.5% of GDP (2014 est.) |
| GDP - composition, by end use | household consumption: 69.3% government consumption: 20.3% investment in fixed capital: 13.3% investment in inventories: 0.5% exports of goods and services: 55.9% imports of goods and services: -59.3% (2016 est.) |
| GDP - composition, by sector of origin | agriculture: 14.4% industry: 26.3% services: 59.3% ++ (2016 est.) |
| Agriculture - products | grain, sugar beets, sunflower seeds, vegetables; beef, milk |
| Industries | coal, electric power, ferrous and nonferrous metals, machinery and transport equipment, chemicals, food processing |
| Industrial production growth rate | 2% (2016 est.) |
| Labor force | 18.04 million (2016 est.) |
| Labor force - by occupation | agriculture: 5.8% industry: 26.5% services: 67.8% ++ (2014) |
| Unemployment rate | 10% (2016 est.) 9.1% (2015 est.) note: officially registered workers; large number of unregistered or underemployed workers |
| Population below poverty line | 24.1% (2010 est.) |
| Household income or consumption by percentage share | lowest 10%: 3.8% highest 10%: 22.5% (2011 est.) |
| Distribution of family income - Gini index | 24.6 (2013) 28.2 (2009) |
| Budget | revenues: $27.8 billion expenditures: $30.87 billion note: this is the planned, consolidated budget (2016 est.) |
| Taxes and other revenues | 31.9% of GDP (2016 est.) |
| Budget surplus (+) or deficit (-) | -3.5% of GDP (2016 est.) |
| Public debt | 78.2% of GDP (2016 est.) 79.4% of GDP (2015 est.) note: the total public debt of $64.5 billion consists of: domestic public debt ($23.8 billion); external public debt ($26.1 billion); and sovereign guarantees ($14.6 billion) |
| Fiscal year | calendar year |
| Inflation rate (consumer prices) | 13.5% (2016 est.) 48.7% (2015 est.) note: Excluding the temporarily occupied territories of the Autonomous Republic of Crimea, the city of Sevastopol and part of the anti-terrorist operation zone |
| Central bank discount rate | 22% (23 December 2015) 7.5% (31 January 2012) |
| Commercial bank prime lending rate | 18.5% (31 December 2016 est.) 21.82% (31 December 2015 est.) |
| Stock of narrow money | $19.81 billion (31 December 2016 est.) $19.68 billion (31 December 2015 est.) |
| Stock of broad money | $78.02 billion (31 December 2014 est.) $113.4 billion (31 December 2013 est.) |
| Stock of domestic credit | $60.72 billion (31 December 2016 est.) $62.77 billion (31 December 2015 est.) |
| Market value of publicly traded shares | $20.71 billion (31 December 2012 est.) $25.56 billion (31 December 2011 est.) $39.46 billion (31 December 2010 est.) |
| Current account balance | -$1.315 billion (2016 est.) -$251 million (2015 est.) |
| Exports | $33.97 billion (2016 est.) $35.5 billion (2015 est.) |
| Exports - commodities | ferrous and nonferrous metals, fuel and petroleum products, chemicals, machinery and transport equipment, foodstuffs |
| Exports - partners | Russia 12.7%, Turkey 7.3%, China 6.3%, Egypt 5.5%, Italy 5.2%, Poland 5.2% (2015) |
| Imports | $38.3 billion (2016 est.) $38.94 billion (2015 est.) |
| Imports - commodities | energy, machinery and equipment, chemicals |
| Imports - partners | Russia 20%, Germany 10.4%, China 10.1%, Belarus 6.5%, Poland 6.2%, Hungary 4.2% (2015) |
| Reserves of foreign exchange and gold | $16.01 billion (31 December 2016 est.) $13.3 billion (31 December 2015 est.) |
| Debt - external | $127.7 billion (31 December 2016 est.) $119.8 billion (31 December 2015 est.) |
| Stock of direct foreign investment - at home | $65.95 billion (31 December 2016 est.) $60.95 billion (31 December 2015 est.) |
| Stock of direct foreign investment - abroad | $7.983 billion (31 December 2016 est.) $7.183 billion (31 December 2015 est.) |
| Exchange rates | hryvnia (UAH) per US dollar - 25.26 (2016 est.) 21.8447 (2015 est.) 21.8447 (2014 est.) 11.8867 (2013 est.) 7.99 (2012 est.) |