Economic summary is a review and brief analysis of the key economic indicators and policy measures of the year. It is published in January using the available statistics and annual estimates and updated in May when the most of previous year data becomes publicly available.
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2015 was a year of many wins and losses for Ukraine. The year started with a big escalation of military conflict in the East of the country, which pushed economy to a larger recession than previously expected. Fragile macroeconomic stabilisation was reached in the third quarter of 2015. The Government has finally started implementing long delayed and necessary reforms.
In 2014, Ukraine faced the toughest challenges in the XXI century including economic crisis, military conflict in the East, and annexation of Crimea by Russia. Drop in domestic demand and weak external demand resulted in contraction of real GDP by 6.8%. High economic and political uncertainty resulted in sharp increase in demand for foreign currency. This along with decline in exports lead to sharp hryvnia depreciation.
Real GDP in 2013 remained at the level of 2012 as positive contribution of domestic demand to economic growth was outweighed by negative contribution of net real exports. Decline in investments undermines economic growth in the future. During the year the Government did not approve reforms for fiscal consolidation and improvement of business climate and, as a result, failed to negotiate new IMF program. The Government faced huge liquidity gap in the end of the year, which resulted in delays in financing all expenditures including even wages and social payments. In the end of the year, Ukraine did not sign Association Agreement with the EU and negotiated for closer relations with Russia, which triggered political crisis in the country.
In the first half of 2012 Ukraine’s economy was supported by government spending and tax preferences related to the Euro-2012 football championship. However, benefits from Euro-2012 were limited to improved infrastructure and modest improvement in Ukraine’s visibility on international arena. In the second half of the year the stimulus was withdrawn and external demand slipped leading to recession. Ukraine did not achieve significant progress in domestic reforms and had limited success in external integration projects. Political instability remained one of the major risks for future development of Ukraine.
In 2011 Ukraine’s economy continued recovering from the crisis. The economic growth was supported by domestic demand, while external demand remained weak. The year was marked by large number of negotiations, major of which did not resulted in favourable results for the country. The Government did not continue implementation of reforms in most sectors. Political instability again became one of the major risks for future development of Ukraine. Another risk further related to global economic slowdown.
The cooperation with the IMF was reloaded. On July 28 the IMF Executive Board approved a 29-month SDR 10 billion (near USD 15.15 bn) Stand-By Arrangement for Ukraine. The initial disbursement equivalent to USD 1.89 bn was available immediately.
Ukrainian economy suffered a massive downturn in 2009. Contraction in external demand for Ukrainian products, credit crunch, decline in domestic demand resulted in the real GDP drop at 15.1%. The decline decelerated throughout the year from 20.3% yoy in the first quarter of the year. In the fourth quarter of the year decline remained deep at 6.8% yoy despite low statistical base in fourth quarter of 2008. In nominal terms, GDP was at UAH 914.7 bn in 2009.
Ukraine’s economy entered in a recession in the fourth quarter of 2008 as the world financial crisis uncovered and aggravated weaknesses of the national economy.
Despite a political turmoil and external shocks, the economic growth in the country remained high. According to the Derzhkomstat, in 2007 real GDP grew by 7.3% yoy, thus preserving the growth pace of the previous year. In nominal terms, the GDP reached UAH 709.4 bn, or USD 140.5 bn.
According to the preliminary estimate of the Derzhkomstat, in 2006 real GDP increased by 7.1%, significantly accelerating during the year. In January the growth was estimated at mere 0.9% yoy. In nominal terms, the GDP is estimated at around UAH 536 bn, or USD 106 bn.