Ukraine Economy

Ukraine Economy



Thanks to good resources and long industrial development, Ukraine was a country with a developed and diverse economy. The former Ukrainian SSR was the second most important industrial producer in the Soviet Union and closely linked to the other Union republics. After the collapse of the USSR and the founding of the Ukraine in 1991, the economy initially suffered a dramatic decline (to around half of the gross domestic product by 1999[GDP] from 1990). The economic transformation to a market economy was associated with the dissolution of many political and economic institutions as well as the previous legal system. However, the causes of the difficult economic situation were also the consequences of the disastrous reactor accident at the Chernobyl nuclear power plant in 1986, economic and political tensions with Russia and a lack of modernization and privatization efforts. Significant market economy reforms were only introduced after 1994, and privatization in particular showed serious structural errors. Some economic groups that exclusively pursue their own interests and are anchored in different regions (oligarchs), largely determined politics. Social inequality rose sharply during the 1990s.

Hyperinflation was overcome from the second half of the 1990s with the introduction of the US dollar-linked hryvnia (2014: 12.2%). Economic development has been consolidating since the late 1990s, and from 2000 onwards, despite political crises, it recorded sustained growth. Annual economic growth between 2003 and 2008 ranged between 2.3% and 12.1%. As a result of the international financial and economic crisis, Ukraine suffered a severe slump in 2009 with a GDP decline of – 14.8% (highest GDP decline in Eastern Europe), but was able to recover slightly in the following year (+ 4.2%) and fell back to zero growth in 2013. The recession was not overcome until 2016. Visit campingship for Brief Information About Ukraine.

In addition to the increasing importance of the service sector, industrial production and investments initially developed very dynamically from 2000, also due to increased prices for Ukrainian export products (especially steel). But the economic upswing was nipped in the bud by political instability and widespread corruption as early as 2012. The inflow of foreign direct investment also decreased from US $ 8.4 billion (2012) to US $ 847 million (2014). The gross national income (GNI) per resident is (2017) US $ 2,390. The unemployment rate is 9.3%. The informal sector is very pronounced. There are clear regional differences in economic development, the level of investment and wages in western Ukraine is much lower than in the more industrialized and large-scale eastern Ukraine, whose economy has in parts come to a standstill due to the war.

Foreign trade: The foreign trade balance was relatively balanced in 2000–2004. Due to the sharp rise in energy prices, Ukraine has had a trade deficit since 2005 (import value in 2014: US $ 54.4 billion; export value: US $ 53.9 billion). Important export products are iron and steel products (25.3% of the export value), mineral products, in particular coal, chemical products, machines and devices as well as agricultural products; The main imports are mineral products, especially crude oil and gas (24% of the import value), chemical products and plastics as well as machines, devices and vehicles. The most important trading partner is Russia (23.3% of imports, 18.2% of exports).


Agriculture: Due to the good natural resources (fertile soils on around 80% of the country’s surface), the Ukraine has an efficient agriculture. Of the 415,000 km 2 of arable land, around three quarters are arable land. The remainder are meadows and pastures or are used for permanent crops; arable farming contributes 60% to the value added in agriculture. Despite the change in ownership since 1994 (privatization of the farms) and 2001 (dissolution of the kolkhozes)) the actual private sector in agriculture is still poorly developed. The private subsistence and horticultural agriculture that arose before 1991, on the other hand, supplies an average of 50% of vegetable and 70% of animal products. Grains (wheat, barley, grain maize), sunflowers, potatoes, sugar beets, fodder crops (fodder grain, beets, grasses), rye, field vegetables and buckwheat are grown; Fruit and wine growing is practiced on 1% of the agricultural area. Large areas have insufficient rainfall and are at risk of dry periods and winds, so artificial irrigation arrangements have long been made; Corresponding systems were built especially after 1950; Above all, the water of the large rivers is used by means of canal systems (Kachowka Canal, North Crimean Canal and others). The negative consequences of irrigation are waterlogging and soil salinization; Above all, however, the strong soil erosion (e.g. due to deflation of the arable soil) affects arable farming. Livestock farming on large farms has declined sharply since 1992, but more livestock is again being kept in subsistence and farm farms. Agriculture and forestry accounted for 11.8% of GDP in 2014, and around 17% of the workforce work there.

Forestry: forest areas cover 17% of the territory; Coniferous forests make up about half of the wood stock. Many and extensive forests are located in Polesia (predominantly coniferous forest, also mixed forest), in the Forest Carpathians (northeastern roof: coniferous forest, southwestern roof: deciduous forest, also mixed forest) and in the Crimean Mountains (mainly deciduous forest); on the ridges (forest steppe zone) most of the forests were cleared in the course of agricultural colonization. The logging reached 20.7 million m 3 in 2014.

Fisheries: In the Ukraine, inland, coastal and deep-sea fishing is practiced: in lakes and rivers in Volynia, the Carpathians, in the Crimea and gradually (after the Chernobyl disaster) again in the large Dnieper reservoirs, in the Black and Azov Seas as well as in parts of the oceans. The – sharply declining – catch amount (2014) was 81,000 t.

Service sector

The service sector has a share of 66% of GDP (2017), around 60% of all employees worked in it. In addition to Kiev, commercial, financial and service centers are major cities such as Kharkiv, Dnipro, Odessa and Lemberg.

Tourism: Parts of the Black Sea coast, especially the Crimea, were already at the time of Tsarist Russia, but especially in the Soviet Union, traditional and coveted recreational areas, which have hardly been international travel destinations since the annexation by Russia. Overall, tourism in Ukraine is a poorly developed economic sector. In 2014 around 12.7 million foreign guests visited the country. The cities of Kiev, Lviv and Odessa as well as the Dnieper (river cruises) are attractive for international tourism. The forest Carpathians, the coast of the Sea of ​​Azov, the Shatsk Lake District in Polesia, the valleys of the Dniester and its tributaries, the cities of Chernihiv, and Lutsk are also significant, especially for domestic tourism Umanas well as the great pilgrimage sites.

Ukraine Economy