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    Ukraine Index 2006

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    Ukraine Economy - 2006

      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. Ukraine depends on imports of energy, especially natural gas, to meet some 85% of its annual energy requirements. 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. A dispute with Russia over pricing led to a temporary gas cut-off; Ukraine concluded a deal with Russia in January 2006, which almost doubled the price Ukraine pays for Russian gas, and could cost the Ukrainian economy $1.4-2.2 billion and cause GDP growth to fall 3-4%. 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. GDP growth was 2.4% in 2005, down from 12.4% in 2004. The current account surplus reached $2.2 billion in 2005. The privatization of the Kryvoryzhstal steelworks in late 2005 produced $4.8 billion in windfall revenue for the government. Some of the proceeds were used to finance the budget deficit, some to recapitalize two state banks, some to retire public debt, and the rest may be used to finance future deficits.

      GDP (purchasing power parity):
      $319.4 billion (2005 est.)

      GDP (official exchange rate):
      $77.91 billion (2005 est.)

      GDP - real growth rate:
      2.4% (2005 est.)

      GDP - per capita (PPP):
      $6,800 (2005 est.)

      GDP - composition by sector:
      agriculture: 22.5%
      industry: 33.2%
      services: 44.3% (2005 est.)

      Labor force:
      22.67 million (2005 est.)

      Labor force - by occupation:
      agriculture: 24%
      industry: 32%
      services: 44% (1996)

      Unemployment rate:
      2.9% officially registered; large number of unregistered or underemployed workers; the International Labor Organization calculates that Ukraine's real unemployment level is around 9-10% (2005 est.)

      Population below poverty line:
      29% (2003 est.)

      Household income or consumption by percentage share:
      lowest 10%: 3.4%
      highest 10%: 24.8% (2005)

      Distribution of family income - Gini index:
      29 (1999)

      Inflation rate (consumer prices):
      10.3% (2005 est.)

      Investment (gross fixed):
      17.7% of GDP (January-September 2005)

      revenues: $23.59 billion
      expenditures: $22.98 billion; note - this is the consolidated budget (January-September 2005)

      Public debt:
      18% of GDP (2005 est.)

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

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

      Industrial production growth rate:
      3% (2005 est.)

      Electricity - production:
      181.3 billion kWh (2004)

      Electricity - consumption:
      176 billion kWh (2004)

      Electricity - exports:
      1 billion kWh (2004)

      Electricity - imports:
      255 million kWh (2004)

      Oil - production:
      85,660 bbl/day (2004)

      Oil - consumption:
      491,700 bbl/day (2004)

      Oil - exports:
      NA bbl/day

      Oil - imports:
      NA bbl/day

      Oil - proved reserves:
      395 million bbl (9 November 2004)

      Natural gas - production:
      20.3 billion cu m (2004)

      Natural gas - consumption:
      75.8 billion cu m (2004)

      Natural gas - exports:
      3.9 billion cu m (2004)

      Natural gas - imports:
      59.8 billion cu m (2004)

      Natural gas - proved reserves:
      1.121 trillion cu m (9 November 2004)

      Current account balance:
      $2.24 billion (2005)

      $38.22 billion (2005 est.)

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

      Exports - partners:
      Russia 18%, Germany 5.8%, Turkey 5.7%, Italy 5%, US 4.6% (2004)

      $37.18 billion (2005 est.)

      Imports - commodities:
      energy, machinery and equipment, chemicals

      Imports - partners:
      Russia 41.8%, Germany 9.6%, Turkmenistan 6.7% (2004)

      Reserves of foreign exchange and gold:
      $19.39 billion (2005)

      Debt - external:
      $33.93 billion (30 June 2005 est.)

      Economic aid - recipient:
      $637.7 million (1995); IMF Extended Funds Facility $2.2 billion (1998)

      Currency (code):
      hryvnia (UAH)

      Exchange rates:
      hryvnia per US dollar - 5.1247 (2005), 5.3192 (2004), 5.3327 (2003), 5.3266 (2002), 5.3722 (2001)

      Fiscal year:
      calendar year

      NOTE: The information regarding Ukraine on this page is re-published from the 2006 World Fact Book of the United States Central Intelligence Agency. No claims are made regarding the accuracy of Ukraine Economy 2006 information contained here. All suggestions for corrections of any errors about Ukraine Economy 2006 should be addressed to the CIA.

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    Revised 06-Jun-06
    Copyright © 2006 Photius Coutsoukis (all rights reserved)