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. Growth was 4.4% in 2005, underpinned by strong domestic demand, and solid consumer and investor confidence. The current account surplus reached a record high in 2005. |
GDP - per capita | $6,800 (2005 est.) |
GDP - real growth rate (%) | 4.4% (2005 est.) |
Agriculture - products | grain, sugar beets, sunflower seeds, vegetables; beef, milk |
GDP - composition by sector (%) | agriculture: 18.5%, industry: 44.7%, services: 36.8% (2005 est.) |
Industries | coal, electric power, ferrous and nonferrous metals, machinery and transport equipment, chemicals, food processing (especially sugar) |
Economic aid - recipient | $637.7 million (1995); IMF Extended Funds Facility $2.2 billion (1998) |
Debt - external | $33.93 billion (30 June 2005 est.) |
Population below poverty line (%) | 29% (2003 est.) |
Labor force - by occupation (%) | agriculture 24%, industry 32%, services 44% (1996) |