Main page                           
Eurasian Home - analytical resource

Country profile / Ukraine /


Print version

Economy

The Ukrainian economy has overcome the consequences of the crisis which began at the end of the 80s of the XX century relatively late. Economic growth was fixed only at the turn of 1990s. In this period the Ukrainian Government succeeded in restraining inflation, completed privatization and reoriented industrial production to the foreign markets. In 1993 export shared only 26% of GDP, in 2003 - 57.6%. Within four months of 2004 GDP showed B export-based growth of 72%.

At the same time Ukraine managed to stabilize its financial system. Currently the country has a favorable balance of payments (in 2003 positive trade balance came to $59.4 million) and a permissible correlation of foreign debt to GDP (about 35-40%, while the critical index is 60%). These factors as well as the economic boom which began in 2001 encouraged a sharp influx of foreign investments ($1.4 billion in 2003; $0.7 billion in 2002).

According to the Standard & Poor’s Ratings Service, the Ukrainian sovereign credit rating makes B with the “positive” prognosis, by Moody's Investors Service it makes B1 with the “stable” prognosis and by Fitch it makes B+ with the “stable” prognosis. On January 26, 2005 the International Agency “Rating & Investment Information”, Inc (Japan) raised the rating of the Ukrainian long-term credits in foreign currency from B+ to BB-. R&I explain the rise of Ukraine’s ratings by economic growth and positive balance of payments.

Main economic indicators

GDP
In 2003 real GDP rose almost 9.5%. Experts predicted a slump in the rate of economic growth for 2004, but their forecasts were faulty – GDP growth was a remarkable 12% in 2004.

Nominal GDP
In 2003 GDP made up 263.2 billion UAH ($49.4 billion), in 2004 – 345.943 billion UAH ($65.272 billion).

At the same time, according to the World Economic Outlook Database (April 2004, IMF), purchasing power parity of GDP was $255 billion. In 2004 real GDP made 112% of GDP of the previous year.

GDP - per capita
According to the IMF, GDP– per capita in current prices was $1028; purchasing power parity of GDP– per capita - $5312.

Inflation rate
By 2001 Ukraine could stabilize its financial system and managed to restrain rampant inflation. In 2002 a deflation rate was 0.6%. However, in 2004 inflation rate grew more than 10% and made a record 12.3%. Experts explain these changes by an economic growth, which “heats” consumer and producer price indices. Among other factors that cause the inflation rate growth experts mention a rise of social benefits made by the Government on the eve of the election campaign.

Budget deficit
Budget deficit hasn’t exceeded 3%, which is a result of continuous economic growth and favorable world prices for production of the key industries of Ukraine.

Public debt
On October 31, 2004 Ukraine’s public debt was 84.706 billion UAH ($15.962 billion).

Unemployment rate
Unemployment rate calculated in accordance with the International Labour Organization Standards makes about 9%. According to official data, it doesn’t exceed 3.6%. Due to the rise of the leading industries there is a trend towards a slow reduction in unemployment rate.

Development rate
According to the UNDP ratings on human resources development index, in 2004 Ukraine took the 70th place in the world list (75th in 2003). The worst position Ukraine had since independence was fixed in 1998 - the 102d place; in 1993-94 Ukraine did the best taking the 45th place.

Industrial structure
Past 14 years have seen significant changes in the industrial structure of the Ukrainian economy - a share of industry and agriculture in general volume of GDP has reduced. However, services, transportation, communications and nonproduction sphere account for about a half of GDP that testifies to a slow transition of the country to the postindustrial stage.

In comparison with the soviet period of economic development the fuel and energy complex has grown, while the light industry and machinery weakened.

Labor force – by occupation
Occupational pattern can be characterized by a disproportion between production value and a number of employees at enterprises. This imbalance particularly features agricultural sector: its production makes about 13% of GDP only, while the employees in this sector form 22% of the able-bodied citizens.

Privatization
In 2003 the State Property Fund for the first time fulfilled the budget plan of revenues having raised 2.15 billion UAH (about $403.3 million) from privatization. In 2004 one of the largest metallurgical enterprises “Krivorozhstal” was privatized. (However, at the beginning of 2005 the bargain was disputed in a legal form.). Though privatization has been completed in Ukraine at the beginning of 2000, the role of the public sector remains decisive.

Main Macroeconomic Indicators of Ukraine as % of the previous year

 

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Gross domestic product

87,8

90,0

97,0

98,1

99,8

105,9

109,2

105,2

109,4

112,0

Industrial production

88

95

99,7

99,0

104

112

114

107

116

112

Agricultural production

96

91

98

90

93

110

110

101

89

119

Capital investments

72

78

91

106

100,4

114

121

109

131

1352)

Freight carried

80

75

97

91

92

100

103

104

116

105

Retail trade turnover

86

95

102

95

96

106

115

116

120

119

Industrial producers price index

270 1)

152

108

113

131

121

109

103

108

120

Consumer price indices

477

180

116

111

123

128

112

101

105

109

Export to CIS countries

124

106

75

75

77

138

104

94

138

142

Export to other countries

133

113

124

98

99

121

115

117

125

142

Import from CIS countries

128

112

88

80

85

119

110

102

128

129

Import from other countries

189

117

113

94

75

116

117

115

144

123

1) December to December 2) January-September

Source: Interstate Statistical Committee of the CIS

Key Industries of the Ukrainian Economy

Currently the following industries are dynamically developing in Ukraine: ferrous metals, chemicals, coal and electric power. At the same time the machinery complex created in the soviet period undergoes stagnation and needs restructuring.

 

Statistics

State Committee of Statistics - www.ukrstat.gov.ua

Interstate Statistical Committee of the CIS - www.cisstat.com
Official statistical information on social and economic situation in the CIS countries

FINANCIAL-INDUSTRIAL GROUPS (FIGs)

 

Economists and political scientists are apt to classify the Ukrainian FIGs on a territorial-political basis. Such a principle of classification shows a close connection of regional business elites with the channels of political lobbying. However, this principle can’t be universal, since the Ukrainian FIGs tend to generate interim alliances in order to carry out tactical schemes.

The major Ukrainian FIGs are as follows: “System Capital Mangement” (SCM), “Donbas Industrial Union”, “Interpipe”, “Private”, “Aval”, “TAS”, “Ukrsibbank”, “Ukrprominvest”. Their funds are mainly concentrated in the mining and smelting complex.

The Ukrainian FIGs can be included in agglomerates which are formed on a regional basis and represent political-economic groups.

“Dnipropetrovskaya” political-economic group

“Donetskaya” political-economic group

“Kharkivskaya” political-economic group

“Kyivskaya” political-economic group



Матераилы портала по стране

RUSSIAN - UKRAINIAN RELATIONS
Topic 31.03.2012

UKRAINE: CURRENT POLITICS
Topic 31.03.2012

THE KHARKIV AGREEMENTS BETWEEN RUSSIA AND UKRAINE
Expert forum 29.04.2010

THE EXCHANGE
Opinion 27.04.2010

POOR RELATIONS – THE UKRAINIAN GOVERNMENT GOES TO MOSCOW
Opinion 29.03.2010

 events
 news
 opinion
 expert forum
 digest
 hot topics
 analysis
 databases
 about us
 the Eurasia Heritage Foundation projects
 links
 our authors
Eurasia Heritage Foundation