Ukraine is a developing, diverse economy in Eastern Europe. From 2000 until the start of the global financial crisis in 2008, when the recession hit Ukraine, it expanded fast. In 2010, the economy began to improve again, and that trend continued through 2013.
Ukraine Economy In Europe 2023 [Facts & History]
GDP in 2015 was just slightly above half of its 2013 level, indicating a sharp deterioration in the Ukrainian economy from 2014 to 2015. The economy began to show signs of life again in 2016. Rapid expansion had increased the size of the Ukrainian economy by about 80% by 2018.
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During the 1990s, the Ukrainian economy experienced hyperinflation and a decline in output that reduced GDP to less than half that of the prior Ukrainian SSR. Beginning in 2000, a period of eight consecutive years saw an increase in GDP.
The 2008 worldwide financial crisis put a stop to this expansion. In the first three months of 2010, the Ukrainian economy rebounded and posted GDP growth.
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The early 2010s saw Ukraine lauded for having many of the makings of a large European economy: fertile farmland, a robust industrial base, highly skilled labor, and a good education system.
Ukraine’s economy went into recession in October 2013. In the preceding summer, Russia imposed stronger border and customs control, which significantly reduced Ukrainian exports to Russia.
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Ukraine’s Economical Crisis
Ukraine’s economy and two of the country’s most important industrial districts were hit hard by Russia’s annexation of Crimea at the beginning of 2014 and the War in Donbas that began in the spring of that year. Ukraine’s GDP grew by nothing in 2013.
The GDP of Ukraine fell by 6.8 percent in 2014, and a further 12 percent the following year. The World Bank reported in April 2017 that Ukraine’s economy had grown by 2.3% in 2016, marking the end of a recession. Some journalists have blamed the country’s high levels of corruption on Ukraine’s persistent poverty despite these gains.
A successful agricultural crop and sectors depending on domestic consumption drove 2019 GDP growth, the World Bank reported in April 2020, to a healthy 3.2%.
In 2019, domestic trade increased by 3.4% and agriculture by 1.3%, while household spending grew by 11.9% thanks to a surge in remittances and a revival of consumer loans.
As a result of the COVID-19 epidemic, GDP dropped by 4.4% in 2020. If Russia invades Ukraine in 2022, the IMF predicts the country’s economy might contract by as much as 35 percent.
In 2012, Russia accounted for 25.7% of Ukraine’s exports and 32.4% of its imports. In 2012, the European Union (EU) was both a source and destination for 24.9% of total exports and 30% of total imports. Exports from Ukraine to the rest of the Commonwealth of Independent States (CIS) in 2013 amounted to 35.9%. Meanwhile, European Union countries accounted for 26.6% of total exports.
For Ukraine, the European Union (EU) surpassed China as its main commercial partner in 2015. Ukraine saw a decline in exports to Russia of 12.7% in 2015. Russia was the source of 14.5% of Ukraine’s imports last year.
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Ukraine only accounted for 9 percent of Russian imports last year. In 2017, the European Union purchased 40% of Ukrainian exports while the Commonwealth of Independent States purchased 15%. Ukraine’s exports as a whole rose by 20% last year. Overall, imports increased more rapidly than exports.
Ukraine has 217 trading partners in 2015, and the majority of its exports were food and other agricultural products ($13 billion), metallurgy ($8.8 billion), and equipment ($4.1 billion).
In 2015, exports from Ukraine dropped by 29.3 percent, totaling $38.135 billion. At $37.502 billion, imports saw a 31.1% decline. Nearly half of Ukraine’s exports in 2017 were from the agricultural complex and food industry, with the metals industry contributing just over 20% and the machinery sector contributing nearly 10%.
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To a large extent, Ukraine’s structural trade deficit can be attributed to its dependence on imported natural gas. In 2021, Ukrainian exports earned a record $68.24 billion.
The power generation, fuel, ferrous and non-ferrous metallurgy, chemical and petrochemical and gas, machine building and metal-working, forest, wood-working, wood pulp and paper, construction materials, light, food, and other sectors are all represented by Ukrainian businesses.
In 2012, the industrial sector contributed 26.0% of the GDP. Among Ukraine’s many technological specializations are the electronic component, the military-industrial complex, and the space exploration sector.
Ukraine Resource extraction and manufacturing
Ukraine has a wide variety of mineral reserves, making it one of the world’s most significant resource-producing countries. Over 90 different minerals can be found in these almost 8,000 deposits, but only about 20 have any real commercial use.
About half of all the deposits are being mined at the present time. Ukraine has an estimated 47.1 billion metric tons of coal reserves. Roughly 85 percent of the United States yearly need for coal as a fuel source, or about 100 million tons, can be met by domestic supply.
Ukraine’s oil and gas fields supply 10% of the country’s oil needs and 20% of its gas needs, respectively. The natural gas reserves in Ukraine are estimated at 39.6 trillion cubic feet, although domestic production only accounts for around 20% of annual demand.
Ukraine also has sizable deposits of manganese ore (3 billion tons), chalk and limestone (1.5 billion tons), and iron ore (28 billion tons, respectively). The domestic manufacturing sector has been experiencing chronic energy shortages and accumulated debts of about $792 million in unpaid energy supply bills by the end of 1995.
Ukrainian mines ranked seventh for iron ore production in 2019, eighth for manganese, sixth for titanium and seventh for graphite worldwide in 2019.
In 2018, Ukraine ranked ninth in global uranium production. Half of the world’s neon gas and 40 percent of its krypton come from Ukraine; both are used in the semiconductor industry. Over 90% of the United States neon of semiconductor grade is sourced from Ukraine.