Ukraine on the Ropes
Ukraine on the Ropes

Summary/Abstract: Having already endured political turmoil for more than three years, Ukraine found itself plunged into an economic crisis in September 2008. The hryvnia continues to slide unstoppably: in six months, the Ukrainian currency has lost half its value against the US dollar. Banks have reduced lending and no longer issue loans for home purchases in any form. Gross domestic product (GDP) in November was 14.4% less than a year earlier and unofficial data for December indicate a further significant slowdown. In addition to GDP, manufacturing is also in freefall: car plants are closing their doors one after another, while the heavy industries of eastern and central Ukraine that make a major contribution to the country’s exports have laid off tens of thousands of employees and significantly slashed output. Further job losses are expected in the coming months at factories that attempted to prevent redundancies by cutting wages by 30%-35% in the early months of the crisis. The gravity of the situation is illustrated by figures showing that the almost half a million people employed in the metal industry account for 30% of GDP and 12% of tax income to the budget. The latest estimates from the International Monetary Fund (IMF) predict the end of eight years of economic growth in Ukraine and a contraction of at least 3% in 2009. The organization believes the slide may halt at the end of the year, but expects Ukraine to return to economic growth of 5%-6% only in 2011 at the earliest.[…]

• Details
• Contents