- Economic Outline
- Political Outline
- Foreing Trade in Figures
- Trade Compliance
Economic Outline
Economic Overview
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.
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.
| Main Indicators | 2009 | 2010 | 2011 (e) | 2012 (e) | 2013 (e) |
| GDP (billions USD) | 117.23 | 137.93e | 162.85 | 184.90 | 202.26 |
| GDP (Constant Prices, Annual % Change) | -14.5 | 4.2e | 4.7 | 4.8 | 4.5 |
| GDP per Capita (USD) | 2,550 | 3,013e | 3,575 | 4,079 | 4,485 |
| General Government Balance (in % of GDP) | -2.8 | -3.1e | -1.6 | -1.4 | -2.0 |
| General Government Gross Debt (in % of GDP) | 35.4 | 40.1e | 39.3 | 39.4 | 39.0 |
| Inflation Rate (%) | 15.9 | 9.4e | 9.3 | 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 | -2.88e | -6.34 | -9.71 | -9.90 |
| Current Account (in % of GDP) | -1.5 | -2.1e | -3.9 | -4.9 | - |
Source: IMF - World Economic Outlook Database ; World Bank - Last Available Data.
Note: (e) Estimated Data
Main Sectors of Industry
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.
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.
Indicator of Economic Freedom
- Score:
- 45.8/100
- Position:
- Controlled
- World Rank:
- 157/179
- Regional Rank:
- 42/42
Sources of General Economic Information
- Ministries
- Ministry of Economy Ministry of Finance Ukrainian Ministry of Agriculture Ministry of Home Affairs Ministry of the Coal Industry Ministry of Public Services Ministry of Foreign Affairs Ukrainian Ministry of Culture and Tourism Ukrainian Ministry of Defense Ukrainian Ministry of Health Ukrainian Ministry of Education Ukrainian Ministry of the Family, Youth and Sport Ukrainian Ministry of Labor and Social Policy Ukrainian Ministry of Transport Ukrainian Ministry of Finance Ukrainian Ministry of Justice
- Statistical Office
- State Statistics Committee of Ukraine
- Central Bank
- National Bank of Ukraine
- Stock Exchange
- Ukrainian Stock Exchange PFTS Exchange
- Main Online Newspapers
- The Day Kiev Post
Political Outline
- Type of State
- Parliamentary democracy.
- Executive Power
- The President is the head of State and is elected by popular vote for a five-year term. The President is the commander-in-chief of the armed forces. The Prime Minister is appointed as the head of the government by the President after parliament selects him as the leader of the major political party or alliance to serve a five-year term. The executive power is shared between the President and the Prime Minister. The Cabinet of Ministers is selected by the Prime Minister; the only exceptions are the Foreign Minister and the Minister of Defense who are chosen by the President.
- Legislative Power
- The legislature in Ukraine is unicameral. The parliament called Supreme Council consists of 450 seats with its members chosen on a proportional basis from those parties that gain 3% or more of the national electoral vote; members serve five-year terms. The President has the power to dissolve the Supreme Council, if he so wishes. The people of Ukraine have limited political rights.
- Main Political Parties
- The main political parties in Ukraine are: Bloc Yulia Tymoshenko (129 members of the Supreme Council), led by a charismatic woman politician, Yulia Tymoshenko, who advocates the market economy and democratic values. Party of the Regions (186 members of the Supreme Council), left-wing, advocates the increase of social spending and a pro-Russian foreign policy. Popular Party "Our Ukraine" (81 members of the Supreme Council), the President's party which advocates political reform and massive privatization of the economy.
- Current Political Leaders
- President: Viktor YANUKOVYCH (since February 2010) - Party of Regions Prime Minister: Mykola AZAROV (since March 2010) - Party of Regions
- Next Election Dates
- Presidentials: 2015 Supreme Council: March 2011
Indicator of Freedom of the Press
- World Rank:
- 131/178
- Evolution:
- 41 places down compared to 2009
Indicator of Political Freedom
- Ranking:
- Free
- Political Freedom:
- 3/7
- Civil Liberties:
- 2/7
Foreign Trade in Figures
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.
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 Partner Countries
| 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
Main Products
Source: Comtrade, Last Available Data
Exchange Rate System
- Local Currency
- Ukrainian Hryvnia (UAH)
- Exchange Rate Regime
- The first anti-crisis measures have been, above all, focused on exchange control: suspension of pre-payments; obligation to use letters of credit for payments to non-residents; compulsory conversion of 50% of export receipts; suspension of foreign currencies interbank transactions; suspension of open positions for banks.
- Level of Currency Instability
- There is no specific regulation on currency exchange.
- Exchange Rate on February 2013:
- 1 UAH = 0.1224 USD, 1 USD = 8.1714 UAH 1 UAH = 0.0969 EUR, 1 EUR = 10.3202 UAH
| 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.
Trade Compliance
- International Conventions
- Member of World Trade Organisation Party to the Kyoto Protocol Party to the Washington Convention on International Trade in Endangered Species of Wild Fauna and Flora Party to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal Party to the Montreal Protocol on Substances That Deplete the Ozone Layer Party to the Wassenaar Arrangement on Export Controls For Conventional Arms and Dual-Use Goods and Technologies
- Main International Economic Cooperation
- Ukraine is member of WTO since 2008.
- Party of the ATA Convention on Temporary Admissions and Use of the Carnets
- Yes As a Reminder, the ATA is a System Allowing the Free Movement of Goods Across Frontiers and Their Temporary Admission Into a Customs Territory With Relief From Duties and Taxes. The Goods Are Covered By a Single Document Known as the ATA Carnet That is Secured By an International Guarantee System. Look Up the Other Member Countries And Read the Web Pages of the World Customs Organization Devoted to the ATA Carnet.
- Party of the TIR Convention
- Yes As a Reminder, the TIR Convention and its Transit Regime Contribute to the Facilitation of International Transport, Especially International Road Transport, Not Only in Europe and the Middle East, But Also in Other Parts of the World, Such as Africa and Latin America. The UNCTAD Website Allows You to Read the TIR Convention, See the List of Member CountriesAnd to Find Further Information.
- Accompanying Documents For Imports
- Goods exported to the Ukraine have to be accompanied by the following documents: - The Single Administrative Document (SAD); - The sale invoice, in triplicate; - A phytosanitary certificate. It is required for fruits, vegetables, seeds and other vegetable matter and it is issued by the regional plant protection service; - A health certificate. It is required for meats and is issued by the country authority for vetenary services; - A certificate of origin. It should be drawn up on the community form; - A free sales certificate for cosmetics, issued by the Federation of perfume industries; - Transport documents and the packing list.
- Free Zones
- Ukraine has a large number of free trade zones and this number continues to grow due to its pro-active policy in this area.
- For Further Information
- KMU Official Ukranian Customs website Ministry of Economy of Ukraine Ministry of Finance of Ukraine
- Non Tariff Barriers
- The only important barrier to trade and investment in Ukraine is the country's difficulty in transiting from a planned economy to a market economy. Following economic reforms, the country experienced a relative success concerning export and investment.
There are real structural barriers putting a brake on trade and investment in Ukraine : corruption, lack of protection in terms of intellectual or industrial property, lack of foreign exchange, an ill defined or too bureaucratic hierarchy, an inefficient and little developed banking system, law, license and tariff changes... Investment is precisely curbed by the absence of private property and a coherent privatization programme, non convertibility of the country's currency and lack of financial liquidity, change of legislation relating to investment, lack of quality, lack of competitive prices for hiring or purchasing representative offices, poor infrastructures, political instability...
