In 1991, the government liberalized most prices to combat widespread product shortages, and was successful in overcoming the problem. At the same time, the government continued to subsidize government-owned industries and agriculture by uncovered monetary emission. The loose monetary policies of the early 1990s pushed inflation to hyperinflationary levels. For the year 1993, Ukraine holds the world record for inflation in one calendar year.[75] Those living on fixed incomes suffered the most.[27] Prices stabilized only after the introduction of new currency, the hryvnia, in 1996.
The country was also slow in implementing structural reforms. Following independence, the government formed a legal framework for privatization. However, widespread resistance to reforms within the government and from a significant part of the population soon stalled the reform efforts. A large number of government-owned enterprises were exempt from the privatization process. In the meantime, by 1999, the output had fallen to less than 40 percent of the 1991 level,[76] but recovered to slightly above the 100 percent mark by the end of 2006.[77]
Ukraine's 2006 GDP (PPP) is ranked 28th in the world and estimated at $364.3 billion.[2] Nominal GDP (in U.S. dollars, calculated at market exchange rate) was $106.11 billion, ranked 51st in the world. [1]
In the early 2000s, the economy showed strong export-based growth of 5 to 10 percent, with industrial production growing more than 10 percent per year.[78] The growth was largely attributed to a surge in exports of metals and chemicals to China.
The World Bank classifies Ukraine as a lower middle-income state.[79] Significant issues include underdeveloped infrastructure and transportation, corruption and bureaucracy, and a lack of modern-minded professionals - despite the large number of universities. But the rapidly growing Ukrainian economy has a very interesting emerging market with a relatively big population, and large profits associated with the high risks.[80] The Ukrainian stock market grew significantly 10 times between 2000 and 2006, including 341 percent growth in 2004, 28 percent in 2005, and 24 percent in 2006. Growing sectors of the Ukrainian economy include the IT Outsourcing market, which is expected to grow over 25 percent this year.[81]
By September 2007 the average nominal salary in Ukraine reached 1,426 hryvnias per month.[82] Despite remaining much lower than in neighboring central European countries, the annual growth of average salary income in real terms is approximately 20 percent for several years (2001-2006) in a row.[83]
Ukraine produces nearly all types of transportation vehicles and spacecraft. Antonov airplanes and KrAZ trucks are exported to many countries. The majority of Ukrainian exports are marketed to the European Union and CIS.[84]
The country imports most energy supplies, especially oil and natural gas, and to a large extent depends on Russia as an energy supplier. While 25 percent of the natural gas in Ukraine comes from internal sources, about 35 percent comes from Russia and the remaining 40 percent from Central Asia through transit routes that Russia controls. At the same time, 85 percent of the Russian gas is delivered to Western Europe through Ukraine. [85]
Despite political turmoil the economy of Ukraine continues to rise strongly, in particular the real estate sector, approximately 50% price increase in real estate and 100% price increase in land investment.[86]