+353-1-416-8900REST OF WORLD
+44-20-3973-8888REST OF WORLD
1-917-300-0470EAST COAST U.S
1-800-526-8630U.S. (TOLL FREE)

PRINTER FRIENDLY

Country Forecast Ukraine

  • ID: 2137637
  • Country Profile
  • April 2021
  • Region: Ukraine
  • 51 Pages
  • The Economist Intelligence Unit
Background: Ukraine declared independence from the Soviet Union in 1991. The first president, Leonid Kravchuk, focused on state-building. Leonid Kuchma, his successor, went ahead with IMF-backed reforms, but fraught relations with parliament hampered progress. Mr Kuchma's second term was characterised by backsliding on democratisation and an increasingly powerful role for vested interests. The election as president of the opposition leader, Viktor Yushchenko, in December 2004 led to greater political openness, but power struggles impeded policymaking. The election of Viktor Yanukovych as president in early 2010 led to a reversal in the democratic gains of the Yushchenko era. A refusal to sign an EU association agreement in 2013 in exchange for a Russian loan sparked a wave of anti-government protests that led to a change of government under a new president, Petro Poroshenko. In April 2019 Volodymyr Zelenskyi, a political neophyte, defeated Mr Poroshenko with the strongest electoral performance of any presidential candidate in post-Soviet Ukraine.

Political structure: Constitutional changes to reduce the powers of the presidency took effect in 2006, giving parliamentarians the leading role in forming the cabinet. However, in late 2010 the Constitutional Court rescinded the constitutional reform of 2006. A mixed system of proportional and single-mandate voting was reintroduced for the 2012 parliamentary election. Immediately after the overthrow of Mr Yanukovych, parliament passed a bill to reinforce the 2004 constitution (which transfers significant powers from the presidency to parliament). After much discussion and political debate, decentralisation reforms were voted through in 2014 and became effective in 2015. These increased the financing means and power of local authorities and created larger "amalgamated territorial communities" made up of small counties.

Policy issues: Policy in the wake of a banking crisis in 2014-15 focused on stabilising the financial system to pave the way for a return to economic growth and putting the public finances back on sustainable footing to control the level of public debt. Financial stabilisation has been broadly achieved, including through the conclusion of a US$17.5bn IMF loan programme, a debt-restructuring deal and the nationalisation of PrivatBank. Policy is currently focused on the economic and public health crisis posed by the coronavirus (Covid-19) pandemic and pushing through the reforms necessary to ensure further disbursements under a new US$5bn IMF standby agreement.
Note: Product cover images may vary from those shown
Country Forecast Ukraine

Ukraine--highlights: Political outlook

Ukraine--highlights: Business environment outlook

Ukraine--highlights: Economic outlook

Ukraine--highlights: Demographic outlook

Ukraine--highlights: Market opportunities

Ukraine--highlights: Long-term outlook

Fact sheet

Political outlook: Political forces at a glance
Servant of the People has largest majority in post-Soviet Ukraine

Political outlook: Political stability

Political outlook: Political and institutional effectiveness
Reforms have not been so extensive as to trigger decisive systemic change

Political outlook: Election watch

Political outlook: International relations

Business environment outlook: Business environment rankings
The business environment is set to improve only modestly in 2021-25

Business environment outlook: Ukraine's business environment at a glance
Policy towards private enterprise and competition
Policy towards foreign investment
Foreign trade and exchange controls
Taxes
Financing
The labour market
Infrastructure
Technological readiness

Business environment outlook: Macroeconomic environment

Business environment outlook: Policy towards private enterprise and competition
Deregulation will proceed but only in fits and starts

Business environment outlook: Policy towards foreign investment
Big foreign investors are offered more state support and tax incentives

Business environment outlook: Foreign trade and exchange controls
Government intends to improve trade terms with EU

Business environment outlook: Taxes
Authorities finally embark on tax amnesty for undeclared income

Business environment outlook: Financing
Banking sector continues to recover strongly from the 2014-15 crisis

Business environment outlook: The labour market
Ukraine will continue to operate under Soviet-era labour code

Business environment outlook: Infrastructure
Road modernisation is among the administration's top policy priorities

Business environment outlook: Technological readiness
Citizens to conduct all government interactions on a mobile app
IT industry may be given special tax regime

Economic forecast: Policy trends

Economic forecast: Fiscal policy

Economic forecast: Monetary policy

Economic forecast: International assumptions

Economic forecast: Economic growth

Economic forecast: Sectoral trends
Closer links with the EU are important for export-oriented industries
Much-needed land reform is on the way, but much more could be done

Economic forecast: Inflation

Economic forecast: Exchange rates

Economic forecast: External sector

Economic forecast: Foreign direct investment in Ukraine
Stocks and flows
Origin and distribution
Determinants
Potential

Demographic assumptions
Population decline is a long-term trend
Population will continue to decline in 2021-25
Ageing population will strain pension system

Market opportunities: Market outlook
Household demand will be more subdued than in pre-crisis years
Demographic trends include rise in rural-urban disparities

Market opportunities: Consumer expenditure
Ukraine has considerable catch-up potential across all consumer goods

Market opportunities: Social indicators and living standards

Long-term outlook: The long-term outlook

Long-term outlook: Long-term trends
Climate change and sustainability
Migration trends

Long-term outlook: Methodology for long-term forecasts
Growth projections
Definitions of variables
The independent variables include:
Summary of findings
Productivity growth

Data summary: Global outlook

Data summary: Gross domestic product, current market prices

Data summary: Gross domestic product, at constant prices

Data summary: Gross domestic product by sector of origin

Data summary: Growth and productivity

Data summary: Economic structure, income and market size

Data summary: Fiscal indicators

Data summary: Monetary indicators

Data summary: Employment, wages and prices

Data summary: Current account and terms of trade

Data summary: Foreign direct investment

Data summary: External debt

Data sources and definitions
Global data
Domestic data
Abbreviations

Guide to the business rankings model
Outline of the model
Calculating the rankings
Measurement and grading issues

Indicator scores in the business rankings model
Note: Product cover images may vary from those shown
Adroll
adroll