Business Environment in Ukraine
After years of strong growth, in 2009 Ukraine experienced one of the worst recessions in Europe. Growth rate decreased by -15%, under the joint effect of a decline in economic activity, drying up of foreign funding and a crisis in the global demand for steel. The country faced a collapse of its industrial production, a currency crisis, an inflation hike, and a weakening of its banking system and eventually had to be saved by the International Monetary Fund (IMF). Ukraine resumed growth in 2010 (3.7%), thanks to the recovery of international trade and a political stabilization following the March elections.
The new government elected in Mars has reestablished relations with the IMF (which had been suspended due to the country’s failure to pursue the necessary reforms) and is committed to put in place the planned structural reforms: strengthen the competitiveness of the Ukrainian industrial sector, reform public administration, invest in regional development and deregulation and reform the financial system, fiscal procedures and public finances.
The economic crisis had a deep social impact in Ukraine. Unemployment rose sharply, finally leveling off at just below 9% in 2010. Wage levels have also declined.
For more information, you can refer to the Ukraine Economy Watch website.
|GDP (billions USD)||117.40e||136.42||157.61e||171.37e||175.54e|
|GDP (Constant Prices, Annual % Change)||-14.8||4.2||4.5||4.9||4.5|
|GDP per Capita (USD)||2,569||3,000e||3,483e||3,806||3,918|
|General Government Balance (in % of GDP)||-2.8||-3.1e||-1.6e||-2.0e||-2.5|
|Inflation Rate (%)||15.9||9.4e||9.2e||8.3||7.0e|
|Unemployment Rate (% of the Labor Force)||8.8||8.1||7.8e||7.2e||7.0e|
|Current Account (billions USD)||-1.94e||-2.91||-3.17e||-2.89||-|
|Current Account (in % of GDP)||-1.7e||-2.3||-2.3||-1.9e||-|
Source: IMF - World Economic Outlook Database
Note: (e) Estimated Data
Main Sectors of Industry
The agricultural sector has a major role in Ukraine’s economy. It employs around 17% of the population and contributes around 10% to the GDP. The main crops are cereals, sugar, meat and milk. Ukraine is the fifth biggest exporter of cereals in the world. 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 more than a half of the GDP. The Ukrainian manufacturing sector is dominated by heavy industries such as iron (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 (airplanes, turbines, locomotives and tractors) and ship building are also important sectors. However, it is important to keep in mind that industrial production was much affected by the global economic crisis.
The service sector employs close to 60% of the workforce and contributes up to 38% of the GDP. Ukraine is an energy transit country, providing transportation to western Europe and the Balkans, for Russian and Caspian oil and gas through its territory.
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||16.7||23.9||59.4|
|Value Added (in % of GDP)||8.2||29.4||62.4|
|Value Added (Annual % Change)||-0.3||-24.0||-11.7|
Source: World Bank - Last Available Data.
|Ukrainian Hryvnia (UAH) - Average Annual Exchange Rate For 1 USD||5.12||5.05||5.05||5.27||7.79|
Source: World Bank
Indicator of Economic Freedom
- World Rank:
- Regional Rank:
Foreign Trade in Figures
Ukraine is a very open economy and the share of foreign trade in the country’s GDP has reached over 100%. The recession in 2009 led to a drop in exports and a reduction in domestic demand, leading to a considerable adjustment of the trade balance, since imports declined more rapidly than exports and later grew also less rapidly. 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 Ukrainian 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.
|Foreign Trade Indicators||2006||2007||2008||2009||2010|
|Imports of Goods (million USD)||45,039||60,618||85,535||45,487||60,910|
|Exports of Goods (million USD)||38,368||49,296||66,954||39,782||51,479|
|Imports of Services (million USD)||8,582||11,055||15,777||11,070||11,037|
|Exports of Services (million USD)||10,822||13,651||17,302||13,324||16,041|
|Imports of Goods and Services (Annual % Change)||6.8||19.9||12.5||38.6||-|
|Exports of Goods and Services (Annual % Change)||-5.6||3.2||2.5||25.6||-|
|Imports of Goods and Services (in % of GDP)||49.5||50.4||47.8||48.0||-|
|Exports of Goods and Services (in % of GDP)||46.6||44.8||41.7||46.3||-|
|Trade Balance (million USD)||5,194||10,572||16,091||4,307||-|
|Trade Balance (Including Service) (million USD)||3,068||8,152||14,350||-||-|
|Foreign Trade (in % of GDP)||96.1||95.2||89.6||94.3||-|
Source: WTO - World Trade Organization ; World Bank
Main Partner Countries
(% of Exports)
|Other partnersClose extended list||62.9%|
(% of Imports)
|Other partnersClose extended list||47.1%|
Sources of General Economic Information
Ministry of Economy
Ministry of Finance
Ukrainian Ministry of Agriculture
Ministry of Home Affairs
Ministry of the Coal Industry
Ministry of Public Services
Ministry of Foreign Affairs
Ukrainian Ministry of Culture and Tourism
Ukrainian Ministry of Defense
Ukrainian Ministry of Health
Ukrainian Ministry of Education
Ukrainian Ministry of the Family, Youth and Sport
Ukrainian Ministry of Labor and Social Policy
Ukrainian Ministry of Transport
Ukrainian Ministry of Finance
Ukrainian Ministry of Justice
- Statistical Office
State Statistics Committee of Ukraine
- Central Bank
National Bank of Ukraine
- Stock Exchange
Ukrainian Stock Exchange
- Search Engines
GOOGLE Ukraine (website in Russian)
TOPPING Ukraine (website in Russian)
Yandex Ukraine (website in Russian)
- Economic Portals
"Korrespondent" Review (website in Russian)
"Management consulting" agency
- Executive Power
- The President is the head of State and is elected by popular vote for a five-year term. The President is the commander-in-chief of the armed forces. The Prime Minister is appointed as the head of the government by the President after parliament selects him as the leader of the major political party or alliance to serve a five-year term. The executive power is shared between the President and the Prime Minister. The Cabinet of Ministers is selected by the Prime Minister; the only exceptions are the Foreign Minister and the Minister of Defense who are chosen by the President.
- Legislative Power
- The legislature in Ukraine is unicameral. The parliament called Supreme Council consists of 450 seats with its members chosen on a proportional basis from those parties that gain 3% or more of the national electoral vote; members serve five-year terms. The President has the power to dissolve the Supreme Council, if he so wishes. The people of Ukraine have limited political rights.
- Main Political Parties
- The main political parties in Ukraine are:
Bloc Yulia Tymoshenko (129 members of the Supreme Council), led by a charismatic woman politician, Yulia Tymoshenko, who advocates the market economy and democratic values.
Party of the Regions (186 members of the Supreme Council), left-wing, advocates the increase of social spending and a pro-Russian foreign policy.
Popular Party "Our Ukraine" (81 members of the Supreme Council), the President's party which advocates political reform and massive privatization of the economy.
- Current Political Leaders
- President: Viktor YANUKOVYCH (since February 2010) - Party of Regions
Prime Minister: Mykola AZAROV (since March 2010) - Party of Regions
- Next Election Dates
- Presidentials: 2015
Supreme Council: March 2011
Indicator of Freedom of the Press
- World Rank:
- 3 places down compared to 2008
Indicator of Political Freedom
- Political Freedom:
- Civil Liberties:
Any Comments About This Content? Report It to Us.
2012 Country Commercial Guide for U.S. Companies doing business in the Ukraine.
U.S. Commercial Service on 19 Aug 2012 related to Business Environment in Ukraine
Article about opportunities and advantages for outsourcing of software, information technology (IT) development to Ukraine
Marketplace UkrRos LLC on 3 Feb 2013 related to Business Environment in Ukraine
The new issue of IBobserver newspaper, the first specialized edition in Ukraine and the CIS region devoted to the international trade development, has been released.
IBcontacts on 26 Jun 2012 related to Business Environment in Ukraine
ITF presents major research findings that address the challenges facing the international trade and capital market sectors
Investment and Trade Foundation (ITF) on 19 Mar 2012 related to Business Environment in Ukraine
The joint research of the Investment and Trade Foundation (ITF) and Cai & Lenard Law Firm on the protection of intellectual property in the Internet becomes actual.
Cai & Lenard on 15 Mar 2012 related to Business Environment in Ukraine
The U.S. Commercial Service in Kyiv, Ukraine would like to inform interested U.S. engineering firms to an upcoming bidding opportunity for a feasibility study contract on a proposed Liquefied Natural Gas (LNG) Terminal Project in Ukraine.
U.S. Commercial Service on 23 Mar 2011 related to Business Environment in Ukraine
Find the related Ukrainian companies with Kompass:
Customs Broker, Legal Services, Ukraine
US GovTrade Promotion, the United States
Trade Finance, Ukraine
Legal, Invest Management,, Ukraine