Shipbuilding

The basis of the field is formed by 9 shipbuilding plants as well as enterprises of ship machine-building, scientific-research institutes and design bureaus. Availability of production, scientific research and staff potential allows to satisfy the demands of customers in the construction and repairing of vessels and ships, practically of all types and classes. Shipbuilding plants have mastered the production of the new types of vessels, competitive in the world market.

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Iron and steel complex

Iron and steel complex of Ukraine consists of 365 enterprises, including 14 metallurgical factories and plants, 7 pipe production plants, 10 plants of hardware production, 16 coke chemical plants, 17 plants on the production of fire resistant, 26 ore extracting enterprises, 3 iron alloy plants, 26 plants of non-ferrous metallurgy, 35 enterprises of second black and colored metallurgy. According to the volumes of production metallurgical complex of Ukraine occupies the third place in Europe and the seventh place in the world. The basic technological cycles are extraction of raw materials, production of cast iron and rolled steel. The leading enterprises of the field are – OJSC "Mariupol Metallurgical Factory named after Illich" (Mariupol), State Factory "Kryvorizhstal'" (Kryvyi Rih), OJSC "Metallurgical factory "Azovstal'" (Mariupol'), OJSC "Zaporizhstal'" (Zaporizhzhya) and others.

Non-ferrous metallurgy has such subfields in its structure: mineral-raw material, mountain ore, aluminum, titanium-magnesium, rare metal and semi-conductive materials, hard alloy, lead-zinc, antimony-mercury, electrode, metal processing and silicon.

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Chemical and petrochemical industry

At present in the chemical complex of Ukraine there are more than 200 enterprises 62,7% of which are Joint Stock companies. In the conditions of hard competition in such segments of market of chemical goods as nitrogen fertilizers and ammonia, enterprises in a whole preserve significant volumes of export supplies at the expense of goods of non-organic chemistry, organic synthesis, tires, chemical fibers, etc.

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Energy sector

Energy sector is a highly developed branch of the national economy of the country with a full cycle of designing, production, distribution and sale of the electric power and heat energy, that provides power supply to the internal consumers. The total capacity of the power stations in the country is 54 million kW. Among those the thermal power plants (TPP) are 36.4 million kW (or 67 per cent), the nuclear power plants (NPP) are 12.8 million kW (or 24 per cent), and hydraulic power plants (HPP) are 4.7 million kW (or 9 per cent). Distribution of the power within UES is performed by 27 Joint Stock local energy transmitting companies.

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Agriculture

Ukraine has a favorable combination of climatic conditions, land and labor resources, well-developed transport infrastructure, and close foreign markets. This accounts for the high potential of its agricultural production. The agricultural sector produces 12.8% of GDP, employing a fifth of the working population. Ukraine's arable and farming areas comprise 42 million square km, the largest in Europe after Russia. Planted crops account for 54.5% of total agricultural output. Among the dominant crops are wheat, corn, sugar beets, sunflowers, legumes, tobacco, vegetables, and fruits. Ukraine ranks fifth in grain crops in the world. In 2004 Ukraine harvested almost 46 mln. tons of grain. Livestock farming includes cattle, pigs, sheep, horses, etc. Great progress has been made in poultry farming, fisheries, and apiculture. In agriculture restructuring began with the first years of independence. After 2000 the drastic reforms came to the village: the land owned by collective farms is being divided among the peasants, who can not freely manage their lots; conditions are being provided for farmers to expand their farms, and agricultural enterprises are being arranged on a voluntary basis in a fashion chosen by the peasants themselves. 13,300 new agricultural units have been formed, including farms (46%), cooperatives (25%), private and leased businesses (21%). The infrastructure of the agricultural market is introduced most resolutely and consistently on the basis of the wholesale and exchange trade of agricultural produce. An alternatively owned network of processing and procurement businesses is being established. Ukraine is currently determined to re-establish its age-old reputation as the breadbasket of Europe.

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Light industry

Light industry is one of the most socially significant fields of national economy. It unites 25 subfields that comprise almost 500 production enterprises. They produce flax, cotton, silk cloths as well as cloths for tights and stockings, jersey and ready made garments, china-pottery dishes, artificial leather, etc.

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Transportation complex

As indicated by the transit factor, Ukraine ranks among the leaders in Europe. The European Transportation Conference in Crete (1994) identified 10 trans-European corridors of which four cross Ukraine. Development of the TransCaucasian transport/communications project (TRACECA Project) to span Europe, the Caucasus, and Central Asia is underway. Ukraine has developed pipeline, railroad, and automotive transport networks. Of these, railroad is the indisputable leader, claiming 50% to 70% of long-distance carriage. Its tracks rank fourth in length worldwide (after the USA, Russia, and Canada). Truck carriage comes second. The most important highways are under reconstruction. Ukraine's gas pipelines exceed 35,000 kilometers and they are capable of pumping 290 billion cu. meters of gas annually. There are about 4,000 km of major oil-pipelines transporting 90% of Russia's oil to Europe. Construction of the Odessa-Brody oil pipeline was completed in 2001 in combination with an oil terminal in the port of Pivdennyi. The Black Sea and the Azov Sea play an important role in coastal and international traffic. The most important ports in Ukraine are Odessa, Illichivsk, Mykolayiv, Kherson, Feodosiya, and Izmayil.

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Banking System of Ukraine

The evolution of the national banking system in Ukraine started in March, 1991, after the adoption of the Law of Ukraine "On Banks and Banking" by the Ukrainian Verhovna Rada. The Ukrainian banking system is a two-tier structure consisting of the National Bank of Ukraine and commercial banks of various types and forms of ownership including the state-owned Export-Import Bank and a specialized commercial Savings Bank.

The National Bank of Ukraine serves as the country's central bank which pursues a uniform state monetary policy to ensure the national currency stability.

Commercial banks are formed as joint-stock companies or as companies on an equal footing with both legal and natural persons involved. The range of commercial banks activities includes: receiving deposits of enterprises, institutions and households, crediting of economic entities and households, investments in securities, formation of cash balance and reserves, as well as other assets, cash and settlement servicing of the economy, foreign exchange operations and other services to natural persons and legal bodies.

The banks act in accordance with the Constitution of Ukraine, the Law of Ukraine "On the National Bank of Ukraine", "On Banks and Banking", the Ukrainian legislation on joint-stock companies and other economic entities, as well as with the normative regulations of the National Bank of Ukraine and their Statutes.

Starting from January 1, 1998, the banking system of Ukraine has been adopted to the international accounting and statistics standards.

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Ukrainian wood industry

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Review of Ukrainian economy development in 2004

Majority of experts agree in the opinion that year 2004 was one of the best for Ukraine’s economy. Real GDP is expected to come to no less than 12% thus reaching maximal figure over the years of growth. The fact that Ukraine moved 43 positions up in the world rating of economic freedom and held 88th place having significantly outstripped China, Russia, and Belarus reflects our successes as well.

Qualitative structural shifts took place in Ukrainian economy: synchronization of growth rates in industries and strengthening of ties between them, harmonization of economy pattern due to augmentation of share of industries oriented at the local market, and activation of investment processes. Economic growth was based first of all at development of real sector. Volumes of construction, domestic, and foreign trade kept expanding.

Intensive growth of industry in 2004 (by 12.5%) was reinforced by growth in labor productivity on the background of high dynamics over the last several years. Industries producing investment output and goods for domestic market – machine building, wood processing, light industry, pulp and paper sector, and food industry – were developed in advanced rates.

Agriculture increased by 19.1% over the first eleven months of 2004 due to which losses from bad harvest of the last year were offset.

Investment activities became the engine of economic growth. Investment to fixed capital increased by 34.5% over three quarters of 2004 thus enabling mass renovation of main production capacities. Major part of investment was spent for modernization of industry, transportation, and communications. It made a basis for transfer of economy into innovation model of development.

Despite political risks that became more serious on the eve of elections, flow of direct foreign investments revived thanks to positive dynamics of economy development and improvement of business climate. Foreign investors put USD 1.3 bln. to Ukraine for 9 months of 2004.

Local companies managed to get use of exceptionally favorable external conjuncture. Stability of US dollar rate to Ukrainian Hrivnya did not cause damage to international competitiveness of Ukrainian export. Price factors were added with structural ones. New advanced technology production was introduced on foreign markets. Export of goods over 10 months of 2004 increased by 43.3% while import augmented by 28%. As a result positive balance of foreign trade in goods constituted USD 3.2 bln.

Net international gross reserves of the National Bank increased in 2004 by 1.6 times. Level of economy monetarization expanded on this basis up to 33.2%. Accretion of monetary base since the beginning of the year made 34.1%, monetary stock – 32.4%, and cash outside banks – 27.9%.

Panic demand occurred on currency market in November-December 2004, though they were efficiently overcome with the help of stabilization measures taken by the National Bank of Ukraine. It gave the possibility to relieve the stress in the society and to restore cracked trust to banking sphere.

Conditions of money supply formation have also improved. Average credit rate curtailed from 21% to 17.5%. Credit input to the economy increased by 35.3% over 11 months of 2004. Active credit policy supported high dynamics of economic development and was conducted on the background of curbed inflation. National Bank of Ukraine has increased bank rate three times from 7% to 9%.

Consumer prices grew by 12.3% over the year, while prices of industrial output manufacturers increased by 24.1%. Experts call irregularity of budget resources spending for social sphere by the Government during the year and growth of producers’ prices in particular on the markets of energy carriers and foodstuffs as factors that provoked growth of inflation rates.

Revenues and expenditures of state budget in 2004 were totally completed. More than UAH 9.3 bn from privatization of state property were transferred to the budget herewith. Significant portion of revenues was directed at financing of social programs.

Real revenues of population increased by 16.2% over 11 months of 2004 while real salary augmented by 24.1%. Increased paying capacity of population reflected in expansion of demand on the local market. Savings of individuals play at present more important role in formation of banking system credit resources.

Positive changes took place on labor market as well. The number of unemployed curtailed by 7% over eleven months of 2004. Registered unemployment rate was fixed at the level of 3.4% as of December 1, 2004.

Though positive tendencies reinforced in 2004 were saddened by political instability, Ukrainian economy kept significant potential for further development. Inevitable process of leadership replacement will to some extent slow down economic growth in the first half of 2005. However interest to Ukraine caused by “orange revolution” could become a serious incentive both for foreign investors and change of the state status on the world scene. If economy would return to normal course quite quickly and business climate would improve, political instability would have only temporary negative effect. By the end of the year Ukrainian economy has all chances to achieve quite high rates of growth.