In Soviet times, the
economy of Ukraine was the second largest in the Soviet Union, being
an important industrial and agricultural component of the country's
planned economy. With the collapse of the Soviet system, the country
moved from a planned economy to a market economy. The transition
process was difficult for the majority of the population which
plunged into poverty. Ukraine's economy contracted severely
following the years after the Soviet collapse. Day to day life for
the average person living in Ukraine was a struggle. A significant
number of citizens in rural Ukraine survived by growing their own
food, often working two or more jobs and buying the basic
necessities through the barter economy.
In 1991, the government liberalized most prices to combat widespread
product shortages, and was successful in overcoming the problem. At
the same time, the government continued to subsidize
government-owned industries and agriculture by uncovered monetary
emission. The loose monetary policies of the early 1990s pushed
inflation to hyperinflationary levels. For the year 1993, Ukraine
holds the world record for inflation in one calendar year. Those
living on fixed incomes suffered the most. Prices stabilized
only after the introduction of new currency, the hryvnia, in 1996.
The country was also slow in implementing structural reforms.
Following independence, the government formed a legal framework for
privatisation. However, widespread resistance to reforms within the
government and from a significant part of the population soon
stalled the reform efforts. A large number of government-owned
enterprises were exempt from the privatisation process. In the
meantime, by 1999, the output had fallen to less than 40 percent of
the 1991 level, but recovered to slightly above the 100 percent mark
by the end of 2006.
Ukraine's 2007 GDP (PPP), as calculated by the IMF, is ranked 29th
in the world and estimated at $399.866 billion.[2] Nominal GDP (in
U.S. dollars, calculated at market exchange rate) was $140.5
billion, ranked 41st in the world. By December 2007 the average
nominal salary in Ukraine reached 1,774 hryvnias per month. Despite
remaining lower than in neighbouring central European countries, the
annual growth of average salary income in real terms is about 20
percent for the 2001–06 period.
In the early 2000s, the economy showed strong export-based growth of
5 to 10 percent, with industrial production growing more than 10
percent per year. Ukraine produces nearly all types of
transportation vehicles and spacecraft. Antonov airplanes and KrAZ
trucks are exported to many countries. The majority of Ukrainian
exports are marketed to the European Union and CIS. Since
independence, Ukraine has maintained its own space agency, the
National Space Agency of Ukraine (NSAU). The first astronaut of the
NSAU to enter space under the Ukrainian flag was Leonid Kadenyuk on
May 13, 1997. Ukraine became an active participant in scientific
space exploration and remote sensing missions. Between 1991 and
2007, Ukraine has launched six self made satellites and 101 launch
vehicles, and continues to design spacecraft. So to this day,
Ukraine is recognised as a world leader in producing missiles and
missile related technology
The country imports most energy supplies, especially oil and natural
gas, and to a large extent depends on Russia as its energy supplier.
While 25 percent of the natural gas in Ukraine comes from internal
sources, about 35 percent comes from Russia and the remaining 40
percent from Central Asia through transit routes that Russia
controls. At the same time, 85 percent of the Russian gas is
delivered to Western Europe through Ukraine.
The World Bank classifies Ukraine as a middle-income state.
Significant issues include underdeveloped infrastructure and
transportation, corruption and bureaucracy. In 2007 the Ukrainian
stock market recorded the second highest growth in the world of 130
percent.[96] According to the CIA, in 2006 the market capitalisation
of the Ukrainian stock market was $42.87 billion. Growing sectors of
the Ukrainian economy include the information technology (IT)
market, which topped all other Central and Eastern European
countries in 2007, growing some 40 percent.
