COUNTRY PROFILES
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UkraineCapital Currency Population EU status GDP Employment Government type Religions Languages Exports Imports |
COUNTRY PROFILE
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Ukraine |
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Over the last five years the Ukrainian economy has demonstrated dynamic and rapid growth that has captured the attention of the international investment community. The economic growth numbers are not only the highest for transition countries in the region but far outperform other European countries as well. However, Ukraine has not managed to fully overcome declining GDP figures as world prices for many commodity type exports dropped in the recent past. The Chamber is confident that the recovery of Ukrainian economic growth, which started in the second half of 2005, should continue in 2006. This will be supported by improvements in the investment climate, elimination of transfer-pricing and increased political stability, which should follow the March parliamentary elections.
Strenghtening economy
In 2006, Ukrainian economic growth should be strengthened by the likely cancellation of the Jackson-Vannik Amendment by the US Congress, and by Ukraine joining the WTO. The Jackson-Vannik Amendment allows US authorities to impose discriminative tariffs against imports from Ukraine. At the time of going to press the US Senate had repealed the amendment and the Chamber will continue to lobby for the House of Representatives to do so as well. The lack of WTO membership also diminishes the negotiating power of Ukrainian exporters with WTOmember nations, and Ukraine continues to keep WTO accession high on its priority list. At the end of 2005, Ukraine obtained “market economy” status and at the time of going to press was concluding bilateral trade agreements with the EU.
“Market economy” status gives Ukrainian exporters more weight in defending their pricing models in antidumping cases, while the bilateral trade agreements should loosen some of the trade barriers that the EU has been using to reduce the inflow of low-priced goods coming from Ukraine. The chance of Ukraine receiving “market economy” status from the US looks good for 2006 and the Chamber will continue to be actively involved in this process to ensure success. Other sectors of the Ukrainian economy, which should benefit from trade liberalisation, are chemicals, consumer and light industries, as well as agriculture. It is expected that the improvement of the investment climate and political stability, coupled with the rebound of world commodity prices and trade liberalisation, should accelerate Ukrainian GDP growth from 4% in 2005 to 6% in 2006.
Ukrainian labour market
Ukraine continues to offer among the lowest salaries in Europe (both official and real), therefore it will become the logical choice for the growing number of companies seeking to minimise labour costs by locating plants and equipment in Ukraine. However, because Ukraine’s economically active population is shrinking while unemployment remains relatively low, employers will have to continue raising salaries and wages in order to attract qualified employees.
Ukrainian stock market
Rising personal disposable income will continue the trend of increasing the demand for consumer goods in Ukraine. While the banking sector is adding fuel to this demand (through individual loan programmes), companies that produce food and beverages, clothes and electronics are direct beneficiaries. As of 1 November 2005, only a handful of consumer goods companies were listed on the Ukrainian stock exchange. Slavutich Brewery is currently the most popular and one of the most frequently traded. The Chamber expects new names to be introduced to the stock market in 2006.
Ukrainian Centre for the Promotion of Foreign Investments
In 2005 Ukraine introduced new mechanisms of investment support that are successfully utilised in global markets. One such instrument is based upon the traditional centre of assistance to foreign investment that exists in 177 countries of the world. The Ukrainian Centre for the Promotion of Foreign Investments is envisaged to be a one-stop shop that will provide services to foreign investors who desire to enter the Ukrainian market by providing timely and relevant information.
Facts in brief
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Ukraine’s location is in Eastern Europe, bordering the Black Sea, between Poland, Romania, and Moldova in the west and Russia in the east. Strategic position at the crossroads between Europe and Asia; second-largest country in Europe
Its climate is temperate continental: Mediterranean only on the southern Crimean coast; precipitation disproportionately distributed, highest in west and north, lesser in east and southeast; winters vary from cool along the Black Sea to cold farther inland; summers are warm across the greater part of the country, hot in the south
Natural resources include iron ore, coal, manganese, natural gas, oil, salt, sulphur, graphite, titanium, magnesium, kaolin, nickel, mercury, timber, arable land
Agricultural products are grain, sugar beets, sunflower seeds, vegetables; beef, milk
Industries include coal, electric power, ferrous and nonferrous metals, machinery and transport equipment, chemicals, food processing (especially sugar)
Diplomatic representation in the US — Chief of mission: Ambassador Oleh V Shamshur
Diplomatic representation from the US — Chief of mission: Ambassador John E Herbst
Contact Information
American Chamber of
Commerce in Ukraine
42-44 Shovkovychna vul
LL1 Floor
Kiev 01601, Ukraine
Tel: +38 044 490 5800
E-mail: acc@amcham.ua
Website: www.amcham.kiev.ua
Useful websites
| www.worldbank.org/ua | Economy and investment in Ukraine |
| kiev.usembassy.gov | US Embassy in Ukraine |
| www.ukraineinfo.us | Ukrainian Embassy in the US |
| www.e-ukraine.org | National and regional development |
| www.fita.org/countries/ukraine | General and business information |