Economy in Ukraine

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 1992-97 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. Implementation of KUCHMA's economic agenda is encountering considerable resistance from parliament entrenched bureaucrats and industrial interests; and an environment of corruption continues to discourage foreign investors. One signal achievement has been the reduction of the inflation rate to 10% by yearend 1997. If KUCHMA succeeds in implementing aggressive market reforms during 1998 the economy should reverse its downward trend with real growth occurring by late 1998 and into 1999.

GDP: purchasing power parity—$124.9 billion (1997 est.)

GDP—real growth rate: -3.2% (1997 est.)

GDP—per capita: purchasing power parity—$2 500 (1997 est.)

GDP—composition by sector:

agriculture: 14%

industry: 30%

services: 56% (1997 est.)

Inflation rate—consumer price index: 10% (yearend 1997 est.)

Labor force:

total: 22.8 million (yearend 1997)

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: 2.6% officially registered; large number of unregistered or underemployed workers (December 1997)

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: -1.8% (1997 est.)

Electricity—capacity: 52 million kW (1997)

Electricity—production: 177 billion kWh (1997)

Electricity—consumption per capita: 3 431 kWh (1997)

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

Exports:

total value: $15.2 billion (1997 est.)

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

partners: Russia China Belarus Turkey Germany (1997)

Imports:

total value: $20.2 billion (1997 est.)

commodities: energy machinery and parts transportation equipment chemicals plastics and rubber

partners: Russia Turkmenistan Belarus Germany China

Debt—external: $9.6 billion (including $2.1 billion to Russia) (yearend 1997 est.)

Economic aid:

recipient: ODA $220 million (1993)

note: commitments 1992-95 $4.5 billion ($4.1 billion drawn)

Currency: on 2 September 1996 Ukraine introduced the long-awaited hryvnia as its national currency replacing the karbovanets (in circulation since 12 November 1992) at a rate of 100 000 karbovantsi to 1 hryvnia

Exchange rates: hryvnia per US$1—1.9359 (February 1998) 1.8617 (1997) 1.8295 (1996) 1.4731 (1995) 0.3275 (1994) 0.0453 (1993)

Fiscal year: calendar year