Economy of Ukraine: Past and Today
Ukraine, being a large European country, has a well-developed industrial base, rich farmlands, highly trained labour and a good educational system.
Ukraine is relatively rich in natural resources, particularly mineral deposits. Although oil reserves in the country are largely exhausted, it has other important energy sources, such as coal, hydroelectricity and nuclear fuel raw materials.
Ukraine has a major ferrous metal industry, producing cast iron, steel and a wide range of metal ware, including pipes. As of 2007, Ukraine was the world’s eighth 
largest steel producer. Another important branch is country’s chemical and petrochemical industry producing coke, mineral fertilisers, acids, soda etc. Manufactured goods include metallurgical equipment, diesel locomotives, tractors, automobiles. The country possesses a massive high-tech industrial base, including electronics, arms industry, space program and is a major producer of grain, sugar, meat and milk products.
Ukraine encourages foreign trade and investment. The Verkhovna Rada (Parliament of Ukraine) has approved a foreign investment law allowing foreign investors to purchase businesses and property, to repatriate revenue and profits, and to receive compensation if the property is nationalised.
Ukraine is transporting gas from the Russian Federation to the European Union through its well-developed gas pipelines system, being the Europe’s vitally important gas transiter. Ukraine is independent in its electricity supply, exporting it to other countries of Eastern Europe. The recent energy strategy provides for gradual decreasing of gas- and oil-based generation in favour of nuclear power, as well as energy saving measures, shortening of industrial gas consuming.
Since 2000 Ukraine confidently belongs to the group of countries, which are the world leaders in terms of highest rate of macroeconomic indices.
Ukraine’s currency, the hryvnia, was introduced in September 1996, and till now has remained fairly stable.
The balanced fiscal and monetary policy, growth of domestic demand and development of national market together with the favourable economic situation in the world ensured expansion of activities in the most spheres of economy, and based on this, the well-being of the Ukrainian citizens is gradually increasing.
Since 2005 Ukrainian economy has been under raising inflation processes. According to the State Statistics Committee (www.ukrstat.gov.ua), inflation in Ukraine for January-July 2008 upped by 26.4 percent against the same period of 2007, but a 0.5 percent deflation was fixed in July against June 2008. Credit relations are developing rapidly, competition is increasing; economy restructure is put in practice more effectively.
In 2000-2004, after ten years of economic recession, the real Gross Domestic Product was growing at the highest rate in Europe and amounted 44.2%. In 2005, 2006, 2007 and 2008 the real GDP in Ukraine increased by 2.6%, 6.7%, 7.2% and 6.5% correspondingly. In July 2008 GDP came to 530 billion hrvn.
One can witness the growing of the industrial production in the majority of key industries of Ukraine, which increased by 6.2% in 2000-2003, 12.5% in 2004, 3,1% in 2005, 6.2% in 2006, 10.7% in 2007. In January-July 2008 the industrial production upped by 7.3% against the same period of 2007. The largest increment of the gross value at that period (compared to January-July 2007) was in trade and amounted 11.8%, in agriculture – 10.8%, energy industries – 8,6 %, processing industry – 8.4%, transporting – 4.8%.
The positive trends in machinery were resulted mainly by growth in the automotive industry (by 55.0%), agricultural machinery and equipment (by 54.2 %), railway vehicles production (24.5%), etc.
There are also positive transformations in the social sphere. During last few years the Ukraine has managed to implement the policy of advancing growth of real population’s income comparatively with the GDP growth. The real population income increased in January-July 2008 over 16.1% to compare with the relevant period of the last year.
Total foreign direct investment in Ukraine since 1994 was approximately $36.5 billion as of July 2008, $4.3 billion in 2007 alone. Traditionally, the biggest countries-investors are Germany, Cyprus, Italy, the Russian Federation, the Netherlands, Austria, and the United Kingdom.
In 2008 Ukraine fulfilled its obligations aimed at accessing the World Trade Organization and creation of the necessary domestic economic infrastructure. On 16 May 2008 Ukraine became the 152nd member of the WTO.
Next important step in strengthening the external economic activities and expansion of foreign trade is the negotiations on Free Trade Area (FTA) with the European Union. The FTA will be a core part of the New Enhanced Agreement being negotiated between Ukraine and the EU.