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Ukraine - Overview

Contents extracted from the comprehensive atlas of international trade by Export Entreprises


Capital:: Kiev
Area:: 604 km2
Total Population:: 45.593
Annual growth rate:: -0.00%
Density:: 79.00/km2
Urban population:: 69%
Population of Kiev (3.300), Kharkiv (1.674), Donetsk (1.570), Dnipropetrovsk (1.480), Odessa (1.200), Lviv (1.040), Zaporizhzhya (782)
Official language: Ukrainian
Other languages spoken: The Constitution protects minority languages, especially Russian which is spoken in the center, south and in the east of the country. Indeed, Russian speaking people are the most significant national minority in Ukraine (22%). Otherwise, the administration only uses Ukrainian. However, the majority of civil servants are bilingual, even if some of them prefer using Russian. In Crimea, the language spoken is Tatar. It is highly recommended to speak only Ukrainian in the western part of the country.
Business language: Russian remains the language of business except in the west of the country. Although there are more and more people with some knowledge of English, an interpreter is often required.
Ethnic Origins:: Ukrainians 77.8%, Russians 17.3%, Others 4.9%.
Beliefs: Orthodox: 83.7% (Kyiv Patriarchate: 50.4%, Moscow Patriarcate: 26.1%, Autocephalous Orthodox: 7.2%), Ukrainian Greek Catholic: 8%, Roman Catholic 2.2%, Protestant: 2.2%, Jewish: 0.6%, Other: 3.3%.
Telephone codes:
To make a call from: 0
To make a call to: +380
Internet suffix:: .ua
Type of State::
Parliamentary democracy.
Type of economy::
Developing market economy
Importance of the agricultural sector (10% of GDP); economy greatly dependent on Russian gas; the country has been hardly hit by the economic crisis

Economic overview

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 weak growth thanks to the recovery of international trade, a political stabilization and a good harvest, yet later suffered the effects of the eurozone recession, which weakened its exports. Suffering from recession since late 2012 (the country experienced zero growth in 2013), the Ukranian economy is not expect to recover in 2014. Consumption, the main driver of growth, should be affected by the slowly rising wages given the severe budgetary constraints, but also by the rising prices.

The Ukrainian economy is going through a difficult period, while the Ukranian government faces a popular protest movement. In 2013, the macroeconomic imbalances of the country became unsustainable. As an effect of a the fixed and overvalued exchange rate (until very recently), the deficit of the current account deepened to more than 9% of the GDP and due to lack of competitiveness, exports and GDP stagnated. The international reserves fell to a very low level due to the high external payments and limited access to international bond markets. The budget deficit of 2013 reached 4.5% of the GDP and the state accumulated significant arrears. The protest movements which were sparked off in 2013 by Ukraine's decision to not sign the Association Agreement with the European Union, left 80 people dead and resulted in the deposition of president Viktor Janukovych. The political and social situation is very unstable and there is a risk of its instability becoming permanent. Russia's decision to deploy troops in Crimea has increased the risk over the country's territorial integrity. Ukraine has signed a preliminary agreement with the IMF, which should release 27 billion USD of international aid to avoid the state defaulting on payments nad limit the economic damage left by the political crisis, which has now been going on for four months. Of this amount, the IMF aid will represent between 14 and 18 billion USD.

Ukraine has finally signed the Association Agreement with the EU on June 27, 2014, which aims in particular to remove the trade barriers between the country and the European Union members.

The economic crisis had a deep social impact in Ukraine. Wages fell and unemployment rose sharply (8%). For more information, you can refer to the Ukraine Economy Watch website.

Main industries

The agricultural sector has a major role in Ukraine’s economy. It employs around 16% of the population and contributes nearly 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 represents more than 30% of the GDP. The Ukrainian manufacturing sector, greatly hit by the global economic crisis of 2008-9, 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.

The service sector employs over 60% of the workforce and contributes up to 59% 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.

Foreign trade overview

Ukraine is a very open economy and the share of foreign trade in the country’s GDP has reached almost 110% (average for 2010-2012). 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. In 2013, the deficit decreased by 5.7% compared to 2012, because of exports and imports declining at a fairly equal pace. 

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. 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.


Increasing in the recent years, the FDI flux into Ukraine have slowed down due to the global recession and the severe economic crisis affecting the country. After having recovered in 2010 (23.7% increase on 2009), the FDI flux dried, declining from 4.13 billion USD in 2012 to 2.86 billion USD in 2013.

The failure of establishing a closer relationship with Brussels and the uncertainty regarding the government's unwillingness to comply with the IMF's demands have both negatively affected investor confidence.

Apart from the economic downturn, the inefficient and corrupted legal system, complexity of legislation and regulation, poor contract enforcement and poor governance constitute serious impediments to investment. This is so despite the fact that the country has its strengths: a large domestic market, proven agricultural potential, energy and mineral resources and a strategic geographic location which makes it a transit hub and a gate to Europe.

The main investors in Ukraine are Cyprus, Germany, The Netherlands, UK, Austria, the United States and Russia. Apart from the energy sector, direct foreign investment is concentrated mainly in the banking and food processing sectors. You can refer to the Invest in Ukraine website for more information.

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