Ukraine: Economic and Political Outline
Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline
After years of strong growth, in 2009 Ukraine experienced one of the worst recessions in Europe. Growth rate decreased by -15%, under the joint effect of a decline in economic activity, drying up of foreign funding and a crisis in the global demand for steel. The country faced a collapse of its industrial production, a currency crisis, an inflation hike, and a weakening of its banking system and eventually had to be saved by the International Monetary Fund (IMF). Ukraine resumed growth in 2010 (3.7%), thanks to the recovery of international trade and a political stabilization following the March elections.
The new government elected in Mars has reestablished relations with the IMF (which had been suspended due to the country’s failure to pursue the necessary reforms) and is committed to put in place the planned structural reforms: strengthen the competitiveness of the Ukrainian industrial sector, reform public administration, invest in regional development and deregulation and reform the financial system, fiscal procedures and public finances.
The economic crisis had a deep social impact in Ukraine. Unemployment rose sharply, finally leveling off at just below 9% in 2010. Wage levels have also declined.
For more information, you can refer to the Ukraine Economy Watch website.
| Main Indicators | 2009 | 2010 | 2011 | 2012 (e) | 2013 (e) |
| GDP (billions USD) | 117.23 | 137.93e | 162.85 | 184.90 | 202.26 |
| GDP (Constant Prices, Annual % Change) | -14.5 | 4.2 | 4.7 | 4.8 | 4.5 |
| GDP per Capita (USD) | 2,550 | 3,013 | 3,575 | 4,079 | 4,485 |
| General Government Balance (in % of GDP) | -2.8 | -3.1e | -1.6e | -1.4 | -2.0 |
| General Government Gross Debt (in % of GDP) | 35.4 | 40.1 | 39.3e | 39.4 | 39.0 |
| Inflation Rate (%) | 15.9 | 9.4e | 9.3e | 9.1 | 7.5 |
| Unemployment Rate (% of the Labor Force) | 8.8 | 8.1 | 7.8 | 7.4 | 7.2 |
| Current Account (billions USD) | -1.73 | -2.88 | -6.34 | -9.71 | -9.90 |
| Current Account (in % of GDP) | -1.5 | -2.1 | -3.9e | -4.9 | - |
Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data
Note: (e) Estimated Data
The agricultural sector has a major role in Ukraine’s economy. It employs around 17% of the population and contributes around 10% to the GDP. The main crops are cereals, sugar, meat and milk. Ukraine is the fifth biggest exporter of cereals in the world. Ukraine is rich in mineral resources, the main ones being iron and magnesium, and in energy resources (coal and gas).
The secondary sector employs 24% of the population and contributes more than a half of the GDP. The Ukrainian manufacturing sector is dominated by heavy industries such as iron (Ukraine is the 6th biggest producer of iron in the world), and steel. These two sectors alone, account for 30% of the industrial production. Coal mining, chemical and mechanical products (airplanes, turbines, locomotives and tractors) and ship building are also important sectors. However, it is important to keep in mind that industrial production was much affected by the global economic crisis.
The service sector employs close to 60% of the workforce and contributes up to 38% of the GDP. Ukraine is an energy transit country, providing transportation to western Europe and the Balkans, for Russian and Caspian oil and gas through its territory.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 15.8 | 23.4 | 60.7 |
| Value Added (in % of GDP) | 8.1 | 29.0 | 62.8 |
| Value Added (Annual % Change) | 3.5 | 3.5 | 1.0 |
Source: World Bank - Last Available Data.
| Monetary Indicators | 2006 | 2007 | 2008 | 2009 | 2010 |
| Ukrainian Hryvnia (UAH) - Average Annual Exchange Rate For 1 USD | 5.05 | 5.05 | 5.27 | 7.79 | 7.94 |
Source: World Bank - Last Available Data.
Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation
See the Country Risk Analysis Provided By Ducroire.
Ukraine is a very open economy and the share of foreign trade in the country’s GDP has reached over 100%. The recession in 2009 led to a drop in exports and a reduction in domestic demand, leading to a considerable adjustment of the trade balance, since imports declined more rapidly than exports and later grew also less rapidly. Ukraine's three main suppliers are: Russia, the Commonwealth of Independent States (CIS), Germany, Italy, China, Poland, Turkmenistan and Turkey. Russia is a major supplier of oil and gas, almost a third of Ukrainian total imports. The Ukraine mainly imports fuels and oil, machinery, vehicles, electric and electronic equipment and plastics.
Its main customers are Russia and the CIS (25%), Turkey and Europe. Main export goods are iron and steel, fuels and oil, nuclear reactors and boilers, machinery and machine tools (nearly 30% of exports), and cereals.
| Foreign Trade Indicators | 2006 | 2007 | 2008 | 2009 | 2010 |
| Imports of Goods (million USD) | 45,039 | 60,618 | 85,535 | 45,487 | 60,910 |
| Exports of Goods (million USD) | 38,368 | 49,296 | 66,954 | 39,782 | 51,479 |
| Imports of Services (million USD) | 8,582 | 11,055 | 15,777 | 11,070 | 11,037 |
| Exports of Services (million USD) | 10,822 | 13,651 | 17,302 | 13,324 | 16,041 |
| Imports of Goods and Services (Annual % Change) | 6.8 | 19.9 | 12.5 | -38.6 | 8.8 |
| Exports of Goods and Services (Annual % Change) | -5.6 | 3.2 | 2.5 | -25.6 | 6.2 |
| Imports of Goods and Services (in % of GDP) | 49.5 | 50.4 | 47.8 | 48.1 | 48.9 |
| Exports of Goods and Services (in % of GDP) | 46.6 | 44.8 | 41.7 | 46.4 | 46.7 |
| Trade Balance (million USD) | 5,194 | 10,572 | 16,091 | 4,307 | 8,712 |
| Trade Balance (Including Service) (million USD) | 3,068 | 8,152 | 14,350 | 1,953 | 3,850 |
| Foreign Trade (in % of GDP) | 96.1 | 95.2 | 89.6 | 94.5 | 95.6 |
Source: WTO - World Trade Organization ; World Bank , Last Available Data
| Main Customers (% of Exports) |
2010 |
| Russia | 26.1% |
| Turkey | 5.9% |
| Italy | 4.7% |
| Belarus | 3.7% |
| Poland | 3.5% |
| See More Countries | 56.1% |
| Main Suppliers (% of Imports) |
2010 |
| Russia | 36.5% |
| China | 7.7% |
| Germany | 7.6% |
| Poland | 4.6% |
| Belarus | 4.2% |
| See More Countries | 39.3% |
Source: Comtrade, Last Available Data
Source: Comtrade, Last Available Data
Source: Worldwide Press Freedom Index 2010, Reporters Without Borders
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Last Updates: January 2012