Economic trends
Since 2000, Ukraine has experienced strong economic growth. However, with the global financial crisis, it experienced economic decline in 2009. Inflation increased to a rate of 16% and the unemployment rate, which was at 3% in 2008, trippled. Industrial production is free-falling: -40% in the mechanical construction sector and -50% in the metallurgy area. Domestic consumption shows a drop of more than 10%. The banking sector (especially private), shows significant weakening. In order to revive exports, the central bank decided to devalue the local currency. The IMF gave its consent on the unfreezing of the second phase of the stand-by loan, of USD 2.8 billion, in order to give it assistance.
For more information, you can refer to the Ukraine Economy Watch website.
Main branches of industry
The agricultural sector has a major role in Ukraine’s economy. It employs 20% of the population and contributes around 8% to the GDP. The main crops are cereals, sugar, meat and milk. The Ukraine is the fifth biggest exporter of cereals in the world. The Ukraine is rich in mineral resources, the main ones being iron and magnesium, and in energy resources, coal and gas.
The secondary sector employs 24% of the population and contributes to a third of the GDP. The Ukrainian manufacturing sector is dominated by heavy industries like iron (the Ukraine is the 6th biggest producer of iron in the world), and steel. These two sectors alone, account for 30% of the industrial production. Coal mining, chemical and mechanical products (aeroplanes, turbines, locomotives and tractors) and ship building are also important sectors. However, industrial production reduced by 30% in 2009.
The Ukraine is an energy transit country, providing transportation to western Europe and the Balkans, for Russian and Caspian oil and gas through its territory. It therefore depends extensively on Russia, with whom it has a heavy diplomatic disagreement.
International trade
The share of foreign trade in the country’s GDP has reached nearly 115%. The recession in 2009 led to a drop in exports and a reduction in domestic demand. The Ukraine's imports declined (-53%) more rapidly than exports (-32%).
The Ukraine's three main suppliers are: Russia, the Commonwealth of Independent States (CIS), Germany, Italy, China, Poland, Turkmenistan and Turkey. Russia is a major supplier of oil and gas, almost a third of Ukranian total imports. The Ukraine mainly imports fuels and oil, machinery, vehicles, electric and electronic equipment and plastics.
Its main customers are Russia and the CIS (25%), Turkey and Europe. Main export goods are iron and steel, fuels and oil, nuclear reactors and boilers, machinery and machine tools (nearly 30% of exports), and cereals.
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