Ukraine

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Economics

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 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. 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. After a two-week dispute that saw gas supplies cutoff to Europe, Ukraine agreed to 10-year gas supply and transit contracts with Russia in January 2009 that brought gas prices to "world" levels. The strict terms of the contracts have further hobbled Ukraine's cash-strapped state gas company, Naftohaz. 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. Ukraine reached an agreement with the IMF for a $16.4 billion Stand-By Arrangement in November 2008 to deal with the economic crisis, but the program quickly stalled due to the Ukrainian Government's lack of progress in implementing reforms. The drop in steel prices and Ukraine's exposure to the global financial crisis due to aggressive foreign borrowing lowered growth in 2008 and the economy contracted nearly 15% in 2009, among the worst economic performances in the world. In August 2010, Ukraine, under the Yanukovych Administration, reached a new agreement with the IMF for a $15.1 billion Stand-By Agreement to put the country on the path to fiscal sustainability, reform the gas sector, and shore up the country's banking system. Economic growth resumed in 2010 and 2011, buoyed by exports. After initial disbursements, the IMF program stalled in early 2011 due to the Ukrainian Government's lack of progress in implementing key gas sector reforms, namely gas tariff increases.

GDP (purchasing power parity):

$329 billion (2011 est.)

country comparison to the world: 39

$312.7 billion (2010 est.)

$300.2 billion (2009 est.)

note: data are in 2011 US dollars

GDP (official exchange rate):

$162.9 billion (2011 est.)

GDP - real growth rate:

5.2% (2011 est.)

country comparison to the world: 66

4.2% (2010 est.)

-14.5% (2009 est.)

GDP - per capita (PPP):

$7,200 (2011 est.)

country comparison to the world: 131

$6,800 (2010 est.)

$6,500 (2009 est.)

note: data are in 2011 US dollars

GDP - composition by sector:

agriculture: 9.3%

industry: 34.7%

services: 56.1% (2011 est.)

Labor force:

22.09 million (2011 est.)

country comparison to the world: 29

Labor force - by occupation:

agriculture: 15.8%

industry: 18.5%

services: 65.7% (2008)

Unemployment rate:

7.9% (2011 est.)

country comparison to the world: 94

8.1% (2010 est.)

note: officially registered; large number of unregistered or underemployed workers

Population below poverty line:

35% (2009)

Household income or consumption by percentage share:

lowest 10%: 4.1%

highest 10%: 22.6% (2008)

Distribution of family income - Gini index:

27.5 (2008)

country comparison to the world: 127

29 (1999)

Investment (gross fixed):

19% of GDP (2011 est.)

country comparison to the world: 133

Budget:

revenues: $43.79 billion

expenditures: $50.35 billion

note: this is the planned, consolidated budget (2011 est.)

Taxes and other revenues:

26.9% of GDP (2011 est.)

country comparison to the world: 109

Budget surplus (+) or deficit (-):

-4% of GDP (2011 est.)

country comparison to the world: 128

Public debt:

44.8% of GDP (2011 est.)

country comparison to the world: 62

42.3% of GDP (2010 est.)

Inflation rate (consumer prices):

9% (2011 est.)

country comparison to the world: 187

9.4% (2010 est.)

Central bank discount rate:

11.97% (31 December 2010 est.)

country comparison to the world: 28

10.25% (31 December 2009 est.)

Commercial bank prime lending rate:

15% (31 December 2011 est.)

country comparison to the world: 38

15.869% (31 December 2010 est.)

Stock of narrow money:

$43.42 billion (31 December 2011 est.)

country comparison to the world: 50

$36.41 billion (31 December 2010 est.)

Stock of broad money:

$90.27 billion (31 December 2011 est.)

country comparison to the world: 54

$74.96 billion (31 December 2010 est.)

Stock of domestic credit:

$123.2 billion (31 December 2011 est.)

country comparison to the world: 48

$108.1 billion (31 December 2010 est.)

Market value of publicly traded shares:

$39.46 billion (31 December 2010)

country comparison to the world: 64

$16.79 billion (31 December 2009)

$24.36 billion (31 December 2008)

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

Electricity - production:

172.9 billion kWh (2009 est.)

country comparison to the world: 22

Electricity - consumption:

134.6 billion kWh (2009 est.)

country comparison to the world: 22

Electricity - exports:

4 billion kWh (2009 est.)

Electricity - imports:

6.73 billion kWh (2008 est.)

Oil - production:

82,000 bbl/day (2010 est.)

country comparison to the world: 56

Oil - consumption:

296,000 bbl/day (2010 est.)

country comparison to the world: 45

Oil - exports:

114,000 bbl/day (2009 est.)

country comparison to the world: 63

Oil - imports:

301,900 bbl/day (2009 est.)

country comparison to the world: 36

Oil - proved reserves:

395 million bbl (1 January 2011 est.)

country comparison to the world: 55

Natural gas - production:

20.26 billion cu m (2009 est.)

country comparison to the world: 29

Natural gas - consumption:

44.16 billion cu m (2009 est.)

country comparison to the world: 19

Natural gas - exports:

2.8 billion cu m (2009 est.)

country comparison to the world: 35

Natural gas - imports:

26.7 billion cu m (2009 est.)

country comparison to the world: 13

Natural gas - proved reserves:

1.104 trillion cu m (1 January 2011 est.)

country comparison to the world: 24

Current account balance:

-$5.695 billion (2011 est.)

country comparison to the world: 174

-$2.884 billion (2010 est.)

Exports:

$60.67 billion (2011 est.)

country comparison to the world: 55

$52.19 billion (2010 est.)

Exports - commodities:

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

Exports - partners:

Russia 24.1%, Turkey 5.9%, Italy 4.7% (2010)

Imports:

$72.08 billion (2011 est.)

country comparison to the world: 42

$60.9 billion (2010 est.)

Imports - commodities:

energy, machinery and equipment, chemicals

Imports - partners:

Russia 33.9%, China 8.5%, Germany 8.1%, Poland 5.4%, Belarus 4.1% (2010)

Reserves of foreign exchange and gold:

$38.13 billion (31 December 2011 est.)

country comparison to the world: 45

$34.58 billion (31 December 2010 est.)

Debt - external:

$111.7 billion (31 December 2011 est.)

country comparison to the world: 42

$99.51 billion (31 December 2010 est.)

Stock of direct foreign investment - at home:

$59.3 billion (31 December 2011 est.)

country comparison to the world: 52

$53.3 billion (31 December 2010 est.)

Stock of direct foreign investment - abroad:

$3.203 billion (31 December 2011 est.)

country comparison to the world: 64

$2.803 billion (31 December 2010 est.)

Exchange rates:

hryvnia (UAH) per US dollar -

7.963 (2011 est.)

7.9356 (2010 est.)

7.7912 (2009)

4.9523 (2008)

5.05 (2007)