UKRAINE


Total area: 603,700 sq km (slightly smaller than Texas)
Population:  42 million
Government type: Unitary semi-presidential constitutional republic
Administrative division: Crimea Autonomous Republic, 24 provinces (called „oblast“), and 2 cities with special status
Capital + other major cities: Kyiv (Kiev) (2.80 million) + Kharkiv (1.43 million), Dnipropetrovsk (1.03 million), Donetsk (1.02 million), Odessa (1.0 million)
Currency: hryvnia (UAH)
Languages: Ukrainian (official) 67%, Russian 24%, plus minorities speaking Romanian, Polish, and Hungarian
Ethnicity: Ukrainian 77.8%, Russian 17.3%, Belarusian 0.6%, Moldovan 0.5%, Crimean Tatar 0.5%, Bulgarian 0.4%, Hungarian 0.3%, Romanian 0.3%, Polish 0.3%, Jewish 0.2%, other 1.8%
Religion: Ukrainian Orthodox 50%; Ukrainian Greek Catholic 8-10%; Ukrainian Autocephalous Orthodox 1-2%; Roman Catholic, Protestant, Muslim, Jewish (<1% each)
President: (Mr.) Volodymyr Zelensky (since 20 May 2019)
Prime Minister: (Mr.) Denys Anatoliyovych Shmyhal (since March 2020)
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KEY FEATURES

  • Largest country within Europe
  • Large consumer market with 6 cities of 1 million population or more
  • Large heavy-industry base
  • Strategic location at the crossroads of European, Russian and Asian markets
  • One of the largest refiners of metallurgical products in Eastern Europe
  • "Breadbasket of Europe" - exports substantial amounts of grain, vegetables, sugar beets, sunflower seeds, milk and meat.
  • Underdeveloped transport infrastructure
  • Battling corruption, overregulation, bureaucracy and insufficient law enforcement
  • Current political and economic instability due to Russian occupation of Crimea and fragile ceasefire with pro-Russian separatists in eastern Ukraine's Donetsk and Luhansk regions


MACROECONOMIC OVERVIEW

Selected economic indicators, Ukraine, 2013 - 2019

    2013 2014 2015 2016 2017 2018 2019
GDP
Real GDP growth
%
0.0
-6.6
-9.9
1.5
2.5
3.3
3.2
GDP at current prices
€ bn
135.2
99.6
81.6
84.02
98.72
111.20
123.09
Foreign trade
Exports
€ bn
47.7
40.6
34.4
32.8
37.5
39.9
44.6
Imports
€ bn
58.0
40.9
33.8
35.4
43.1
48.3
54.1
Balance
€ bn
-10.3
-0.4
0.6
-2.6
-5.6
-8.4
-9.5
Prices
CPI - average inflation rate
%
-0.3
12.1
50
14.2
9.9
7
5
PPI - industry - average
%
1.7
31.8
25.4*
35.7*
16.5*
14.2*
-7.4*
Employment
Registered unemployment
%
7.2
9.3
11.5
11
9.4
8.5
8.1
Average monthly gross wage
309
221
173
183
236
276
392
Exchange rates
USD/UAH average
8.15
21.84
25.55
26.59
26.71
27.19
25.79
EUR/UAH average
10.61
15.72
24.23
28.27
30.05
32.11
29.02


*Excluding the temporarily occupied territories, the Autonomous Republic of Crimea and the city of Sevastopol.

State Statistics Committee of Ukraine, Ministry of Economics of Ukraine, European Commission, IMF


Ukraine’s economy is recovering from a deep slump. Following a political and economic crisis in 2014-2015 and cumulative economic decline of 16 percent, Ukraine’s economy began slowly growing in 2016 with two percent year-over-year growth. While the country’s turn-around was primarily attributable to reforms implemented by Ukraine’s first technocratic government, growth in 2016 was driven by a rebound in domestic investment activity and a modest recovery in household consumption. Domestic demand continued to fuel economic growth of 2.5 percent in 2017 and 3.3 percent in 2018.

Ukraine’s global trade continued to grow in 2019, but imports significantly outpaced exports, resulting in negative trade balance of $-10.5 billion. Ukraine’s trade balance surplus in services increased by approximately 10 percent in comparison to 2018 to $8.7 billion in 2019. Goods exported from Ukraine increased by 6.4% in 2019.

Despite its low economic growth and growing trade deficit, Ukraine’s economy has several bright spots, most notably agriculture, which grew 6% in the first half of 2019. Ukraine ranks among the world’s top producers of grain crops including wheat, corn, and barley. In 2016, Ukraine’s sugar exports also reached a 15-year high. Stable agricultural growth presents significant opportunities for U.S. exporters of agricultural machinery, as well as other inputs like seeds and fertilizers.

Ukraine’s recent economic recovery and macroeconomic stabilization are supported heavily by the International Monetary Fund (IMF). Ukraine received $1.4 billion of the first tranche from the International Monetary Fund (IMF) under a new Stand-By Arrangement (SBA) program for Ukraine, approved by the IMF Board of Directors on December 18, 2018. Due this receipt, Ukraine’s international reserves grew to $20.1 billion as of December 21, 2018. Future IMF assistance will depend on additional reforms, including pension reform, land reform, and additional steps to fight corruption. According to the IMF, per capita GDP in Ukraine is still very low—just 20 percent of the EU average and the second lowest level of all Central and Eastern European countries. Faster, sustainable, and inclusive growth is needed to recover lost ground and improve living standards.


KEY SECTORS


The agricultural sector plays a major role in Ukraine’s economy. In 2019, a strong agricultural harvest contributed to the solid growth of the GDP, while the agricultural sector grew by 6% itself in the first half of 2019. The main crops are cereals, sugar, meat and milk. Ukraine is the world's fifth largest exporter of cereals. The country is rich in mineral resources, primarily on iron and magnesium, as well as in energy resources (coal and gas).


The secondary sector employs a quarter of the population and represents 28.6% of the GDP. The Ukrainian manufacturing sector is dominated by heavy industries such as iron (Ukraine is the world's 7th largest producer of iron) and steel. These two sectors alone account for around 30% of the industrial production. However, steel production is now way below its pre-2008 level. Coal mining, chemical products, mechanical products (air planes, turbines, locomotives and tractors) and ship-building are also important sectors.


Iron and steel industries

Ukraine’s machine building and metal-working industries depend on the production of ferrous and non-ferrous metals. Today, over 38,000 enterprises operate in the extraction and processing of metals and in the production of pipes and rolling stock. These include one of the world’s largest steel plants producing cast iron, steel, rolled stock, steel bars and pipes in Kryviy Rih, Dnipropetrovsk, Zaporizhzhia, Mariupol, and other cities.


Mining

Ukraine is one of the world's most important mineral producing countries, in terms of both the range and size of its reserves accounting for 5% of the world’s mineral resource stock. It has almost 8,000 separate deposits, harbouring some 90 different minerals, of which about 20 are economically significant - these include iron ore, coal, manganese (32% of global manganese production), uranium ore, natural gas, oil, salt, sulphur, graphite, titanium, magnesium, kaolin, nickel, mercury, etc. As for iron stocks, manganese, titanium and uranium ore, Ukraine is ranked first among European countries. Ukraine has also Europe's third-largest shale gas reserves at 1.2 trillion cubic meters.


Chemical industry

The multi-branch chemical sector of Ukraine includes chemical, petrochemical and chemical-pharmaceutic sub-sectors with over 1,600 enterprises and structural units. The sector accounts for nearly 10% of industrial fixed assets and over 5% of all those employed by Ukrainian industrial sector. The sector is represented by production of mineral fertilizers, sulfuric acid, coke products, synthetic fibres, caustic soda, and petrochemicals. The industrial plants are mainly in Kyiv, Korosten, Sumy and Fastiv.


Energy
Ukraine operates thermal power plants (steam turbine and diesel types), hydroelectric plants and nuclear power plants. The role of wind and solar power plants is also growing - the country has high average wind speeds, a good solar radiation profile, plentiful biomass raw materials, and numerous dams on the Dnieper River, all ideally suited for renewable energy.


Ukraine operates four nuclear power plants, including the Zaporizhia, Pivdennoukrains'k, Rivne and Khmelnytsky,and hydroelectric power generation cascades (6 large hydroelectric power stations on the Dnieper and 55 small stations on other rivers).




EXPORTS & IMPORTS


The main import commodities are energy, machinery and equipment, cars and chemicals. Exported commodities include ferrous and nonferrous metals, food products, fuel and petroleum products, chemicals, machinery and transport equipment.


Until recent years, Russia was Ukraine's largest trading partner with 25.7% of exports and 32.4% of imports recorded in 2012. By 2015 the EU became Ukraine's largest trading partner, accounting for more than a third of its trade.


Natural gas is Ukraine’s biggest import item and the main cause of the country’s structural trade deficit.


2018 export and import data:




Main import partners:
Russia – 15.4%
China – 12%
Germany – 10.3%
Poland – 8.6 %
Belarus – 6.7%
USA – 4%


Main export partners:
Russia – 8.3%
Poland – 6.3%
Italy – 5.3%
Egypt – 4.9%
Germany – 4.7%
Turkey – 4.6%


Ukraine external trade - 2015




See references for our track record in Ukraine.



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