What You Should Know About Ukraine’s Economy

Russia’s invasion of Ukraine is likely to cause an economic crisis that will shake Europe and Asia.

This is because it will result in the isolation of the world’s 11th-largest economy and one of its largest commodity producers.

The immediate global implications will be higher inflation, lower growth and some disruption to financial markets as deeper sanctions take hold.

The longer-term fallout will be a further debilitation of the system of globalised supply chains and integrated financial markets that has dominated the world economy since the Soviet Union collapsed in 1991.

From all indications, the economy of Ukraine is an emerging free-market economy.

It grew rapidly from 2000 until 2008 when the great recession began worldwide and reached Ukraine as the 2008–2009 Ukrainian financial crisis.

The economy recovered in 2010 and continued improving until 2013. From 2014 to 2015, the Ukrainian economy suffered a severe downturn, with GDP in 2015 being slightly above half of its value in 2013.

In 2016, the economy again started to grow. By 2018, the Ukrainian economy was growing rapidly, and reached almost 80 per cent of its size in 2008.

Here are what makes the Ukrainian economy tick:

Mining

Ukraine has extremely rich and complementary mineral resources in high concentrations and close proximity to each other. The country has abundant reserves of coal, iron ore, natural gas, manganese, salt, oil, graphite, sulfur, kaolin, titanium, nickel, magnesium, timber, and mercury.

Metallic minerals:

The country is ranked the 7th highest in the world in iron extraction: 39 million tonnes and 2.4 per cent of global output (after Australia, China, Brazil, India, Russia and RSA)

The country occupies the 8th position in the world in manganese extraction producing an estimated 651,000 tonnes which is about 3.6 per cent of global output (after South Africa, Australia, China, Gabon, Brazil, Ghana and India).

Ukraine is ranked 6th place in the world in titanium extraction: 431,000 tonnes which is 6.3 per cent of global output (after China, South Africa, Australia, Canada and Mozambique)

It also occupies the second place in the world in gallium extraction: 9 tonnes and 2.9 per cent of global output (after China)

Ukraine is 5th place in the world in germanium extraction after China, Russia, USA and Japan.

Non-metallic minerals:

The country occupies the 6th place in the world in kaolins extraction and accounts for 5,9 per cent of global output (after China, USA, Germany, India and Czech Republic)

It is 10th place in the world in zirconium silicate extraction producing 26,000 tonnes after Australia, RSA, China, Mozambique, Senegal, USA, Kenia, India and Indonesia.

It is 8th place in the world in graphite extraction accounting for 1.3 per cent of global output after China, Brazil, North Korea, India, Russia, Canada and Madagascar.

In the area of mineral fuels, Ukraine occupies the 13th place in the world in power plant coal extraction after China, India, USA, Indonesia, Australia, RSA, Russia, Colombia, Kazakhstan, Poland, Vietnam and Canada)

It is ranked 12th place in the world in cooking coal extraction after China, Australia, Russia, USA, India, Canada, Mongolia, Kazakhstan, Poland, Mozambique and Colombia.

In recent years, the Government of Ukraine has significantly improved and liberalized the system of granting permits for extraction of minerals.