Although Ukraine was one of the most vital parts of the economy of the former Soviet Union, it suffered badly in the wake of its collapse. Recovery did not occur until the turn of the decade but since then, the economy has performed well with growth rates averaging 7.5 per cent.
Economy
In 2008, economic growth slowed to 2.2 per cent, down from over seven per cent the previous year. The economy was buoyant even in the face of political turmoil until the mid part of the year when a drop in steel prices, and the country's exposure to the global financial crisis as a result of aggressive borrowing, took its toll. As a result the authorities agreed a stand-by loan with the International Monetary Fund to provide balance of payments support.
In light of the drastic drop in external demand and steel prices the economy is forecast to contract sharply in 2009. Real GDP growth is expected to be -10 per cent. Slow growth should resume in 2010. Investment Climate A number of new government initiatives have been put in place to encourage foreign investment, including the creation of a state agency for investment and innovation and a number of investor councils chaired by the President. In efforts to accede to the World Trade Organisation (WTO), the country passed no less than 20 laws in 2006 to bring its trading regime into consistency with WTO standards.
Although Ukraine remains a challenging country for exporters, due to complex legal, administrative and tax requirements, consequences of the current financial and economic crisis, its government is committed to reform. Last year the accession to the World Trade Organisation (WTO) was completed and the country hopes to eventually join the EU and NATO.
IT
The Ukraine holds 62nd place in the world ranking of the Information and Communication Technologies development level as identified by the Global IT Report 2009 published by the World Economic Forum. This represents a climb of eight places. Although its current position remains low compared to other European countries, Ukraine has been steadily developing its IT infrastructure. Joining the WTO should lead to increased imports due to zero per cent import duty on IT products. WTO membership has also created opportunity for talks with the EU on the extended free trade zone. This would bring Ukrainian technical regulations closer to European standards and would eventually largely simplify certification and imports of IT equipment, units, spare parts and accessories. More specifically, IT outsourcing is becoming an increasingly important industry with significant annual growth rate.
Opportunities
Ukraine offers long-term opportunities in many sectors, most of which involve co-operation with Ukrainian companies and authorities, and many of which require Western financial investment.
Particular areas of opportunity include:
• Infrastructure and construction
• Rehabilitation of heavy industry
• Fast-moving consumer goods
• Specialised equipment
• Transport
• Communications
• Technical assistance
• Consultancy
• Security
• Education & training
In 2007, Ukraine and Poland were selected to host the European Football Championships 2012. Preparation for EURO 2012 is a huge long-term project for Ukraine which will generate numerous opportunities across a number of sectors, such as: sport infrastructure, roads, airports and hotels.
UK Trade Relationship
In 2008, British exports to Ukraine rose by 31 per cent to £573.9 million and Ukrainian exports to the UK rose by 38 per cent to £178.7 million.
KEY FACTS
Official Name: Ukraine
Capital: Kyiv (Kiev)
Area: 603,700 sq km
Population: 45.9m (UN, 2008)
Major languages: Ukrainian, Russian
GDP (current): US141.2bn (World Bank, 2007)
GDP growth: 7.6% (World Bank, 2007)
GNI per capita: US$2,550 (World Bank, 2007)
Inflation (consumer prices): 25% (2008 est.)
Labour force: 21.71m (2008 est.)
Unemployment: 3% (2008 est.)
Monetary unit: 1 hryvnya = 100 kopiyka
Exports to UK: £178.66m (HMRC 2008)
Imports from UK: £573.92m (HMRC 2008)
CONTACTS
UK Trade & Investment
Kingsgate House
66-74 Victoria Street
London SW1E 6SW
Tel: 020 7215 4950
Email: colin.hosey@uktradeinvest.gov.uk
Web: www.uktradeinvest.gov.uk
British Embassy
9 Desyatinna Street
Kyiv 01025 Ukraine
Tel: 00 380 44 490 3660
Email: commercial.kyiv@gmail.com
Web: www.ukinukraine.fco.gov.uk/en
Embassy of Ukraine
60 Holland Park
London W11 3SJ
Tel: 020 7727 6312
Web: www.mfa.gov.ua/uk
