Ukraine Economy 2007

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. Shortly after independence was ratified 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. Ukraine depends on imports to meet about three-fourths of its annual oil and natural gas requirements. A dispute with Russia over pricing in late 2005 and early 2006 led to a temporary gas cut-off; Ukraine concluded a deal with Russia in January 2006 that almost doubled the price Ukraine pays for Russian gas, and could cost the Ukrainian economy $1.4-2.2 billion. 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 for businesses. 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. In its efforts to accede to the World Trade Organization (WTO), Ukraine passed more than 20 laws in 2006 to bring its trading regime into consistency with WTO standards. GDP growth was 7% in 2006, up from 2.4% in 2005 thanks to rising steel prices worldwide and growing consumption domestically. Although the economy is likely to expand in 2007, long-term growth could be threatened by the government's plans to reinstate tax, trade, and customs privileges and to maintain restrictive grain export quotas.

GDP (purchasing power parity):
$364.3 billion (2006 est.)

GDP (official exchange rate):
$82.36 billion (2006 est.)

GDP - real growth rate:
7.1% (2006 est.)

GDP - per capita (PPP):
$7,800 (2006 est.)

GDP - composition by sector:
agriculture: 10.2%
industry: 32.9%
services: 57% (2006 est.)

Labor force:
21.52 million (2006 est.)

Labor force - by occupation:
agriculture: 25%
industry: 20%
services: 55% (1996)

Unemployment rate:
2.7% officially registered; large number of unregistered or underemployed workers; the International Labor Organization calculates that Ukraine's real unemployment level is 6.7% (2006 est.)

Population below poverty line:
37.7% (2003)

Household income or consumption by percentage share:
lowest 10%: 3.4%
highest 10%: 25.7% (2006)

Distribution of family income - Gini index:
31 (2006)

Inflation rate (consumer prices):
9.1% (2006 est.)

Investment (gross fixed):
24% of GDP (2006 est.)

Budget:
revenues: $34.02 billion
expenditures: $34.71 billion; note - this is the planned, consolidated budget (2006 est.)

Public debt:
14.1% of GDP (2006 est.)

Agriculture - products:
grain, sugar beets, sunflower seeds, vegetables; beef, milk

Industries:
coal, electric power, ferrous and nonferrous metals, machinery and transport equipment, chemicals, food processing (especially sugar)

Industrial production growth rate:
6.3% (2006 est.)

Electricity - production:
192.1 billion kWh (2006)

Electricity - consumption:
181.9 billion kWh (2006)

Electricity - exports:
10.07 billion kWh (2005)

Electricity - imports:
20 billion kWh (2006)

Oil - production:
90,400 bbl/day (2006)

Oil - consumption:
284,600 bbl/day (2006)

Oil - exports:
214,600 bbl/day (2004)

Oil - imports:
469,600 bbl/day (2004)

Oil - proved reserves:
395 million bbl (1 January 2006)

Natural gas - production:
20.85 billion cu m (2006 est.)

Natural gas - consumption:
73.94 billion cu m (2006 est.)

Natural gas - exports:
4 billion cu m (2006 est.)

Natural gas - imports:
57.09 billion cu m (2006 est.)

Natural gas - proved reserves:
1.075 trillion cu m (1 January 2006 est.)

Current account balance:
$-1.617 billion (2006 est.)

Exports:
$38.95 billion (2006 est.)

Exports - commodities:
ferrous and nonferrous metals, fuel and petroleum products, chemicals, machinery and transport equipment, food products

Exports - partners:
Russia 21.4%, Turkey 7.1%, Italy 6.4%, US 4.1% (2006)

Imports:
$44.14 billion (2006 est.)

Imports - commodities:
energy, machinery and equipment, chemicals

Imports - partners:
Russia 28.2%, Germany 11.7%, Poland 7.6%, China 7%, Turkmenistan 5.7% (2006)

Economic aid - recipient:
$409.6 million (1995); IMF Extended Funds Facility $2.2 billion (2005)

Reserves of foreign exchange and gold:
$22.36 billion (2006 est.)

Debt - external:
$39.19 billion (2006 est.)

Stock of direct foreign investment - at home:
$21.19 billion (2006 est.)

Stock of direct foreign investment - abroad:
$222 million (2006 est.)

Market value of publicly traded shares:
$42.87 billion (2006)

Currency (code):
hryvnia (UAH)

Exchange rates:
hryvnia per US dollar - 5.05 (2006), 5.1247 (2005), 5.3192 (2004), 5.3327 (2003), 5.3266 (2002)