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GDP: purchasing power parity—$108.5 billion (1998 est.) Inflation rate (consumer prices): 20% (yearend 1998 est.) Labor force: 22.8 million (yearend 1997) Industries: coal, electric power, ferrous and nonferrous metals, machinery and transport equipment, chemicals, food-processing (especially sugar) Exports: $11.3 billion (1998 est.) Currency: 1 hryvna=100 kopiykas Exchange rates: hryvnia per US$1—3.4270 (February 1999), note: in August 1998, Ukraine introduced currency controls in an attempt to fend off the impact of the Russian financial crisis; it created an exchange rate corridor for the hryvnia of 2.5-3.5 hryvnia per US$1


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 1992-98 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. The onset of the financial crisis in Russia dashed Ukraine's hopes for its first year of economic growth in 1998 due to a sharp fall in export revenue and reduced domestic demand. Although administrative currency controls will be lifted in early 1999, they are likely to be reimposed when the hryvnia next comes under pressure. The currency is only likely to collapse further if Ukraine abandons tight monetary policies or threatens default. Despite increasing pressure from the IMF to accelerate reform, significant economic restructuring remains unlikely in 1999. SOURCE: CIA FACTBOOK


Upon gaining independence from its deeply ingrained ties to the Soviet economy, the Ukraine forecasted favourable investment and development largely due to the countries vast natural resources and industrial base. The government encourages foreign trade and investment with numerous laws simplifying the business environment for Westerners. Some of its diverse sectors include: energy sources, the space industry, grain and sugar, ferrous metals industry (cast iron production, steel and steel pipe), manufactured goods (metallurgic equipment, diesel locomotives, and tractors) and the chemical industry.