Ukraine Business Resources

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. Ukraine depends on imports of energy, especially natural gas, to meet some 85% of its annual energy requirements. Shortly after independence 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. Loose monetary policies pushed inflation to hyperinflationary levels in late 1993. Ukraine's dependence on Russia for energy supplies and the lack of significant structural reform have made the Ukrainian economy vulnerable to external shocks. Ukrainian government officials have taken some steps to reform the country's Byzantine tax code, such as the implementation of lower tax rates aimed at bringing more economic activity out of Ukraine's large shadow economy, but more improvements are needed, including closing tax loopholes and eliminating tax privileges and exemptions. Reforms in the more politically sensitive areas of structural reform and land privatization are still lagging. Outside institutions - particularly the IMF - have encouraged Ukraine to quicken the pace and scope of reforms. GDP in 2000 showed strong export-based growth of 6% - the first growth since independence - and industrial production grew 12.9%. The economy continued to expand in 2001 as real GDP rose 9% and industrial output grew by over 14%. Growth of 4.6% in 2002 was more moderate, in part a reflection of faltering growth in the developed world. In general, growth has been undergirded by strong domestic demand, low inflation, and solid consumer and investor confidence. Growth was a sturdy 9.3% in 2003 and a remarkable 12% in 2004, despite a loss of momentum in needed economic reforms.

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

Airlines
Airlines in Europe
Airlines Worldwide

Airports
Airports in Europe
Airports Worldwide

Country Budget
revenues: $13.57 billion
expenditures: $12.26 billion, including capital expenditures of NA; note - these estimates probably do not include the government's doubling of pensions in September of 2004 (2004 est.)

Currency (code)
hryvnia (UAH)

Currency Exchange Rate
hryvnia per US dollar - 5.3192 (2004), 5.3327 (2003), 5.3266 (2002), 5.3722 (2001), 5.4402 (2000)

Fiscal Year
calendar year

GDP (Gross Domestic Product)
GDP (purchasing power parity): $299.1 billion (2004 est.)
GDP - real growth rate: 12% (2004 est.)
GDP - per capita: purchasing power parity - $6,300 (2004 est.)
GDP - composition by sector:
agriculture: 18%
industry: 45.1%
services: 36.9% (2004 est.)

Imports / Exports
Exports: $32.91 billion (2004 est.)
Exports - commodities: ferrous and nonferrous metals, fuel and petroleum products, chemicals, machinery and transport equipment, food products
Exports - partners: Russia 18%, Germany 5.8%, Turkey 5.7%, Italy 5%, US 4.6% (2004)

Imports: $31.45 billion (2004 est.)
Imports - commodities: energy, machinery and equipment, chemicals
Imports - partners: Russia 41.8%, Germany 9.6%, Turkmenistan 6.7% (2004)

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

Investing
Forex, Foreign Exchange Market: Currency Trading

Labor Force & Unemployment Rate
Labor force: 21.11 million (2004 est.)
Labor force - by occupation: agriculture 24%, industry 32%, services 44% (1996)
Unemployment rate: 3.5% officially registered; large number of unregistered or underemployed workers; the International Labor Organization calculates that Ukraine's real unemployment level is around 9-10 percent (2004 est.)