Key Facts: Ukraine

by World Grain Staff
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Capital: Kiev

Population: 45,700,395 (July 2009 est.)



Government: Republic; Chief of state: President Viktor Yanukovych (since Feb. 25, 2010); Head of government: Prime Minister Yuliya Tymoshenko (since Dec. 18, 2007).

Economy: 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. 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. Ukraine’s dependence on Russia for energy supplies and the lack of significant structural reform have made the Ukrainian economy vulnerable to external shocks. Ukraine depends on imports to meet about three-fourths of its annual oil and natural gas requirements. Ukraine concluded a deal with Russia in January 2006 that almost doubled the price Ukraine pays for Russian gas. Disputes with Russia over pricing have led to periodic gas cut-offs. Outside institutions — particularly the IMF — have encouraged Ukraine to quicken the pace and scope of reforms. Ukrainian government officials eliminated most tax and customs privileges in a March 2005 budget law, bringing more economic activity out of Ukraine’s large shadow economy, but more improvements are needed, including fighting corruption, developing capital markets, and improving the legislative framework. Ukraine’s economy was buoyant despite political turmoil between the prime minister and president until mid-2008. Real GDP growth exceeded 7% in 2006-07, fueled by high global prices for steel (Ukraine’s top export) and by strong domestic consumption, spurred by rising pensions and wages. The drop in steel prices and Ukraine’s exposure to the global financial crisis due to aggressive foreign borrowing lowered growth in 2008, and the economy contracted more than 14% in 2009, among the worst economic performances in the world. Ukraine reached an agreement with the IMF for a $16.5-billion standby arrangement in November 2008 to deal with the economic crisis. However, political turmoil in Ukraine as well as deteriorating external conditions are likely to hamper efforts for economic recovery.

GDP per capita: $6,400 (2009 est.); Inflation: 16.5% (2009 est.); Unemployment 4.8% (2009 est.).

Currency: hryvnia (UAH). 7.96 Hryvnias equal 1 U.S. dollar (March 19, 2010).

Exports: $41.49 billion (2009 est.): Ferrous and nonferrous metals, fuel and petroleum products, chemicals, machinery and transport equipment, food products.

Imports: $45.58 billion (2009 est.): Energy, machinery and equipment, chemicals.

Major crops/agricultural products: Grain, sugar beets, sunflower seeds, vegetables; beef, milk.

Agriculture: 10% of GDP and 19.4% of the labor force.

Internet: Code. .ua; 706,485 (2009) hosts and 10.354 million (2008) users.