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 equipment and raw materials to industrial and mining sites in other regions of the former USSR. Ukraine depends on imports of energy, especially natural gas. Shortly after the implosion of the USSR 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 in 1992-97 fell to less than half the 1991 level. Loose monetary policies pushed inflation to hyperinflationary levels in late 1993. Since his election in July 1994, President KUCHMA has pushed economic reforms, maintained financial discipline, and tried to remove almost all remaining controls over prices and foreign trade. Implementation of KUCHMA's economic agenda is encountering considerable resistance from parliament, entrenched bureaucrats, and industrial interests; and an environment of corruption continues to discourage foreign investors. One signal achievement has been the reduction of the inflation rate to 10% by yearend 1997. If KUCHMA succeeds in implementing aggressive market reforms during 1998, the economy should reverse its downward trend, with real growth occurring by late 1998 and into 1999.
GDP: purchasing power parity-$124.9 billion (1997 est.)
GDP-real growth rate: -3.2% (1997 est.)
GDP-per capita: purchasing power parity-$2,500 (1997 est.)
GDP-composition by sector: agriculture: 14% industry: 30% services: 56% (1997 est.)
Inflation rate-consumer price index: 10% (yearend 1997 est.)
Labor force: total: 22.8 million (yearend 1997) by occupation: industry and construction 32%, agriculture and forestry 24%, health, education, and culture 17%, trade and distribution 8%, transport and communication 7%, other 12% (1996)
Unemployment rate: 2.6% officially registered; large number of unregistered or underemployed workers (December 1997)
Budget: revenues: $18 billion expenditures: $21 billion, including capital expenditures of $NA (1997 est.)
Industries: coal, electric power, ferrous and nonferrous metals, machinery and transport equipment, chemicals, food-processing (especially sugar)