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Ukraine Economy

    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 equipment and raw materials to industrial and mining sites in other regions of the former USSR. Ukraine depends on imports of energy, especially natural gas. Shortly after the implosion of the USSR 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 in 1992-98 fell to less than half the 1991 level. Loose monetary policies pushed inflation to hyperinflationary levels in late 1993. Since his election in July 1994, President KUCHMA has pushed economic reforms, maintained financial discipline, and tried to remove almost all remaining controls over prices and foreign trade. The onset of the financial crisis in Russia dashed Ukraine's hopes for its first year of economic growth in 1998 due to a sharp fall in export revenue and reduced domestic demand. Although administrative currency controls will be lifted in early 1999, they are likely to be reimposed when the hryvnia next comes under pressure. The currency is only likely to collapse further if Ukraine abandons tight monetary policies or threatens default. Despite increasing pressure from the IMF to accelerate reform, significant economic restructuring remains unlikely in 1999.

    GDP: purchasing power parity—$108.5 billion (1998 est.)

    GDP—real growth rate: -1.7% (1998 est.)

    GDP—per capita: purchasing power parity—$2,200 (1998 est.)

    GDP—composition by sector:
    agriculture: 14%
    industry: 30%
    services: 56% (1997 est.)

    Population below poverty line: 50% (1997 est.)

    Household income or consumption by percentage share:
    lowest 10%: 4.1%
    highest 10%: 20.8% (1992)

    Inflation rate (consumer prices): 20% (yearend 1998 est.)

    Labor force: 22.8 million (yearend 1997)

    Labor force—by occupation: industry and construction 32%, agriculture and forestry 24%, health, education, and culture 17%, trade and distribution 8%, transport and communication 7%, other 12% (1996)

    Unemployment rate: 3.7% officially registered; large number of unregistered or underemployed workers (December 1998)

    Budget:
    revenues: $18 billion
    expenditures: $21 billion, including capital expenditures of $NA (1997 est.)

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

    Industrial production growth rate: -1.5% (1998 est.)

    Electricity—production: 171.8 billion kWh (1998)

    Electricity—production by source:
    fossil fuel: 47%
    hydro: 9.2%
    nuclear: 43.8%
    other: 0% (1998)

    Electricity—consumption: 174 billion kWh (1998)

    Electricity—exports: 5 billion kWh (1998)

    Electricity—imports: 7 billion kWh (1998)

    Agriculture—products: grain, sugar beets, sunflower seeds, vegetables; beef, milk

    Exports: $11.3 billion (1998 est.)

    Exports—commodities: ferrous and nonferrous metals, chemicals, machinery and transport equipment, food products

    Exports—partners: Russia, China,, Turkey, Germany, Belarus (1998)

    Imports: $13.1 billion (1998 est.)

    Imports—commodities: energy, machinery and parts, transportation equipment, chemicals, plastics and rubber

    Imports—partners: Russia, Germany, US, Poland, Italy (1998)

    Debt—external: $10.9 billion (October 1998)

    Economic aid—recipient: $637.7 million (1995); IMF Extended Funds Facility $2.2 billion (1998)

    Currency: 1 hryvna=100 kopiykas

    Exchange rates: hryvnia per US$1—3.4270 (February 1999), 2.4495 (1998), 1.8617 (1997), 1.8295 (1996), 1.4731 (1995), 0.3275 (1994)
    note: in August 1998, Ukraine introduced currency controls in an attempt to fend off the impact of the Russian financial crisis; it created an exchange rate corridor for the hryvnia of 2.5-3.5 hryvnia per US$1

    Fiscal year: calendar year

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Revised 1-Mar-99
Copyright © 1999 Photius Coutsoukis (all rights reserved)