Economy of Ukraine

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2.5% (2010 est.)

The economy of Ukraine is an emerging free market, with a gross domestic product that experienced rapid growth from the late 1990s until the late 2000s. Ukraine's economy is ranked 45th in the world according to 2008 GDP (nominal) with the total nominal GDP of 188 billion USD , and 3,900 USD GDP per capita. Formerly a major component of the economy of the Soviet Union, the country's economy experienced major recession during the 1990s, including hyperinflation and drastic falls in economic output; GDP growth was first registered in 2000, and continued for several years. In 2007 the economy continued to grow and posted real GDP growth of 7%.[4]

However Ukraine was greatly affected by the economic crisis of 2008 and as a result the World Bank expects Ukraine's economy to shrink 15% in 2009[8] with inflation being 16.4%.[9] The Ukrainian government predicts GDP growth of 0.4% in 2009, and a slowdown in inflation to 9.5% (also in 2009), although the overwhelming majority of economists consider this forecast to be excessively optimistic.[9] In 2008 the hryvnia (Ukraine's currency) dropped 38% against the US dollar, eclipsed only by the Icelandic krona and the Seychelles rupee.[10] There was 3% unemployment at the end of 2008; over the first 9 months of 2009, unemployment averaged 9.4%.[11] The Ukrainian economy recovered in the first quarter of 2010.[12]

Contents

Overview

In 1910, Ukraine's GDP was estimated at 7 per cent of USA (i.e. about the same size as The Netherlands). By 2010, Ukraine's GDP had shrunk to 1 per cent of USA. The nation has many of the components of a major European economy - rich farmlands, a well-developed industrial base, highly trained labour, and a good education system. At present, however, the economy remains in poor condition. While Ukraine registered positive economic growth beginning in 2000, this came on the heels of eight straight years of sharp economic decline. As a result, the standard of living for most citizens has declined more than 50% since the early 1990s, leading to a relatively high poverty rate. The macroeconomy is stable, and the hyperinflation of the 1990s has subsided[citation needed]. Ukraine's currency, the hryvnia, was introduced in September 1996[citation needed], and has remained fairly stable. The economy has continued to grow since 2000. GDP in 2000 showed strong export-based growth of 6% - the first growth since independence - and industrial production grew 12.9%. The economy continued to expand in 2001 as the real GDP rose 9% and industrial output grew by over 14%. Growth of 4.6% in 2002[citation needed] was more moderate, in part a reflection of faltering growth in the developed world. In general, growth has been undergirded by strong domestic demand, low inflation, and solid consumer and investor confidence. Growth was 9.3% in 2003 and 12% in 2004.[citation needed]

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