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Flag description: two equal horizontal bands of azure (top) and
golden yellow represent grainfields under a blue sky

Ukraine Economy

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 in late 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 in 1992-99 fell to less than 40% 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. Now in his second term, President KUCHMA has pledged to
reduce the number of government agencies and streamline the
regulation process, create a legal environment to encourage
entrepreneurs and protect ownership rights, and enact a
comprehensive tax overhaul. 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 and have
threatened to withdraw financial support. GDP in 2000 showed strong
export-based growth of 6% - the first growth since independence -
and industrial production grew 12.9%. As the capacity for further
export-based economic expansion diminishes, GDP growth in 2001 is
likely to decline to around 3%.

GDP: purchasing power parity - $189.4 billion (2000 est.)

GDP - real growth rate: 6% (2000 est.)

GDP - per capita: purchasing power parity - $3,850 (2000 est.)

GDP - composition by sector: agric