Again and again since then, Ukraine has reaffirmed its commitment to democratic values and chosen European integration as its strategic policy course. Most recently this was demonstrated by the parliamentary elections in 2006, where a large majority of voters participated and the parties in favor of these values received a majority of the votes.
Economic achievements
- European Union and USA designated Ukraine as a market economy.
- Nominal incomes of Ukrainian citizens increased by 43%.
- Inflation in 2005 stood at 10.3% compared to 12.3% in 2004.
- National Bank reserves doubled in 2005.
- The shadow economy was reduced by 7%.
- The “Stop Contraband” customs program was launched reducing corruption and customs clearance procedures while increasing budget revenues by almost 70%.
- “One stop shop” for new business registration was launched.
Socio-political situation
- Freedom and democracy testify to Ukraine’s active civil society.
- Free press and no government censorship.
- Parliamentary elections are conducted “freely and fairly” for the first time since independence.
- “Transparency International” raised Ukraine’s corruption rating to 113 out of 158 countries, attesting to inroads made to fight corruption (Ukraine was 128 in 2004).
- More than one million new jobs were created and unemployment dropped to 7% from 8.6% in 2004.
FDI increasing
- Foreign direct investment into Ukraine’s economy increased by $7.3 billion in 2005.
- “Kryvorizhstal” was sold in a transparent tender to the Mittal Steel Company for $4.8 billion.
- Aval Postal-Pension Bank was sold to Austria’s Raiffaissen Bank for $1 billion; UkrSots Bank was sold to Bank Intessa for over $1 billion; a minority stake in UkrSibBank was sold to French PNB Paribas for several hundred million dollars.
- Successful IPOs on the London Stock Exchange’s Alternative Investment Market by Ukrainian companies were firsts.
- Banking, retail, energy, metals, mining and food processing are among sectors attracting the highest foreign investment.
- A number of well-known large retail chains announced plans to invest in Ukraine, reacting to a strong consumer market.
| Indicators | 2001 | 2002 | 2003 | 2004 | 2005 |
|---|---|---|---|---|---|
| Real GDP Growth, % | 9.2 | 5.2 | 9.6 | 12.1 | 2.6 |
| Average Inflation, % | 6.1 | -0.6 | 8.2 | 12.3 | 10.3 |
| Exchange Rate, USD | 5.37 | 5.33 | 5.33 | 5.32 | 5.05 |
| Current Account Balance, % of GDP | 3.7 | 7.5 | 5.8 | 10.5 | 3.1 |
| Foreign Debt stock, USD billions | 20.4 | 21.6 | 23.8 | 30.6 | 38.8 |
| FDI (USD billions, net) | 0.7 | 0.7 | 1.4 | 1.7 | 7.3 |
| Sources: ICPS, NBU |
