Economy of Ukraine

1. Economic History Note Ukraine’s economy has historically been determined by such factors as its advantageous geographic location at the crossroads between Europe and Asia, an abundance of the most fertile topsoil called chornozem, a rich base of natural resources and a productive labor force. Metals and minerals like coal, iron ore, gas, stone, sand and salt are abundant in Ukraine. Ukraine has 40 % of the world’s manganese ore, as well as the biggest deposits of ozocerite and sulfur in the world. The country also boasts the largest deposits of graphite in continental Europe.

When Ukraine proclaimed independence in August 1991, it had one of the highest indicators for gross national income and also per capita industrial and agricultural production in the former USSR. Ukraine once represented about 5% of global industrial output: 10% of its cast iron production, 9% of steel, and 8% of mined coal. By the 1980s, however, the soviet-style economy began to show considerable unbalance, with an over-emphasis on heavy industries and machine building. More than 80% of industrial manufacturing did not have a closed production cycle, and output of consumer goods was extremely low.

From 1991-1994, Ukraine’s economy went into collapse. This transition period led to GDP plunging 40. 4% as hyperinflation in 1993 reached a record-high 10,256%. By 1994, the government began to define a strategy for economic reform and mechanisms to overcome the economy’s deep crisis. This stage led to lower inflation, macroeconomic stabilization and a halt in industrial decline. Direct foreign investments increased by 5. 8 times in 1995–1998. A phase of economic stabilization and growth started in the first half of 1997, but was interrupted with the start of the Russian financial crisis in 1998.

Growth slowly resumed in late 1999 with almost every economic indicator showing positive results. After an initial decade of decline, Ukraine’s GDP grew 33. 1% over 2000–2003 and continued to grow 3-12% for five consecutive years. After the Orange Revolution in 2004, Ukraine entered a 3-year period of economic growth. The election of President Yushchenko was positively assessed by the international investors, who brought over US $31 billion in foreign direct investment into Ukrainian economy. 2005-2008 were the years of rapid economic growth in banking, construction, telecoms, retail, processing and other sectors.

Economic growth and the availability of mortgage lending spurred a boom in the construction industry and real estate development that led to an unprecedented rise property prices across Ukraine. Despite many hopes, the democratic leaders of the Orange Revolution did not manage to agree on main goals or a strategy of economic development for the country. 2005-2009 became years of political uncertainty, which grew considerably as the global crisis reached Ukraine in Q3 of 2008. In 2008, Ukraine’s economic growth abruptly slowed to 2. 1% y-o-y, pointing to a sharp contraction in Q4.

By the end of 2008, the country’s currency had lost nearly 60% of its value to the US dollar. Depreciation and the deep economic downturn undermined the stability of the banking sector. Fortunately, monetary and government officials began to actively address the weaknesses in the country’s banking system. In 2008, output of domestic machine-building products increased. But because of the crisis, sales volumes of engineering products for January-July 2009 in current prices amounted to only UAH 36. 1 billion, or 51. 5% less than in the same period of 2008.

Nevertheless, profitability of engineering enterprises in January-June 2009 was 5. 2%, which is better than the industrial average of 1. 7%. During the pre-crisis years, exports of key engineering products steadily rose: by 52. 7% in 2007 and 28. 5% in 2008; over January-July 2009, however it plunged 45. 4%. Having contracted 15. 1% in 2009, GDP is estimated to have bounced back only 4. 2% in 2010 and is forecast to grow between 4. 0% and 4. 6% in 2011. In 2008, the average price per sq m of residential space in Kyiv rose higher than US $3,800.

Office estate also became among the most expensive in the world with average monthly rent for Class A premises over US $120 per sq m. Ukraine’s economy remains burdened by excessive regulation, corruption, and lack of law enforcement, and while the government has taken steps against corruption and SMEs have been largely privatized, much remains to be done to restructure and privatize key sectors such as energy and to create a market system for agricultural land. President Yanukovych chairs the Committee on Economic Reform, and in 2010 an economic reform plan was drawn up for 2010-2014.

In December 2010, a comprehensive new Tax Code was passed by the Verkhovna Rada and signed into law, provoking major street protests in Kyiv. In July 2010, following extended negotiations, the International Monetary Fund (IMF) approved a second loan package to Ukraine, after an earlier package negotiated in 2008 went off-track. The new 29-month $15. 2 billion Stand-By Arrangement (SBA) is primarily conditional on adjusting fiscal and monetary policy, increasing the residential natural gas price, and instituting pension reform.

The disbursement of this SBA was postponed in March 2011 until the Ukrainian Government meets its commitments on enacting reforms. The World Bank has committed more than $5 billion to Ukraine since the country joined the Bank in 1992. 2. Economic Overview The world crisis has had an enormous impact on the economic situation in Ukraine. The recession in developed economies has been accompanied by a deterioration in investment supply and a decline in construction volumes. This, in turn, caused prices for metal products and machinery to collapse.

All of this had an adverse effect on export-oriented industries and industries directly or indirectly tied to exports. However Ukraine’s economy is rapidly recovering. Over January–April 2011, crude steel output in Ukraine rose 5. 8% over the same period of 2010, up to 11. 631 million tonnes. Deteriorating sales volumes finally forced Ukraine’s steel industry to lower its ex-works prices. The differential between domestic and export figures has narrowed, but it remains a controversial issue for end-users. Ukraine’s industry is on the upswing, growing 8. 7% year-on-year in the first half of 2011.

The mining industry saw 5. 7% growth during the same period, while the power, gas and water industry rose 7. 0%, and manufacturing 9. 9%. Over January-May 2011, machine-building enterprises saw sales rise by 41. 6%, to UAH 47. 578bn, compared to the same period of the previous year. The share of the machine-building sector in total volume of products sold by the domestic machine-building industry amounted to 10. 9%. In 2010, Ukraine’s machine-building enterprises increased product sales by 37. 8%, ti UAH 101. 819bn. The volume of retail turnover in Ukraine grew by 2.

1%, while domestic transport companies carried 4. 5% more passengers and 0. 2% less cargo than in 2007, 11. 9% y-o-y in 2M11 in comparable prices, to UAH 42. 9bn or US $5. 41bn. After the economic hardship of 2008, 2009 was even more challenging for the residential sector. There were 40% fewer housing starts: only 6. 4mn sq m in total were built as construction ground to a halt for lack of financing. Only some of the projects launched before the crisis were continued and virtually no new investments were made. The average size of housing completed was 96.

1 sq m, with the average for cities 90 sq m and the average for rural areas 133. 4 sq m. In 2010, over 17% more housing space was completed than in 2009. As of May 2010, Ukraine was the third largest borrower from the IMF, following Hungary at $11. 6bn and Romania at $12. 5bn. The IMF granted Ukraine a $16. 4bn loan in October 2008, of which the government has so far received $10. 6bn. Payments were suspended in late 2009, after Ukraine raised minimum wages and pensions, contrary to IMF recommendations. On July 28, 2010, the IMF approved a 29-month $15.

15bn loan to Ukraine. Among others, this was followed by a 50% increase in residential natural gas rates in July 2010, in accordance with a key IMF requirement in exchange for the loan. 3. Industry By the mid-1980s, Ukraine had an established multi-sector, developed industry covering some 20 major industries, including power generation, fuels, ferrous and non-ferrous extraction and processing, chemicals and petrochemicals, gas, machine-building, metal-working, forestry, woodworking, pulp&paper, building materials, light industry, and food processing.

By 1990, around 300 billion kWh of energy, more than 100 million t of iron ore were being mined, and some 40 million tones of rolled steel stock and 6. 5 million t of steel pipes were coming out of domestic steelmills. Ukraine was producing around 37,000 metal -cutting machinetools a year, and more than 100,000 tractors. The energy sector produces a total capacity of more than 53 million kW, including 34. 8mn kW or 65. 3% at thermo-electric stations (TESs), 13. 8mn kW or 25. 9% at atomic energy stations (AESs) and 4.

7mn kW or 8. 8% at hydroelectric stations (HESs). In the coal-mining industry, more than 300 mines are operating today in the country’s three coal-mining regions. Ukraine produces only 5. 5 million t of its own oil, but its complex network of pipelines supports the operation of 10 petroleum plants. Ukraine’s gas pipelines carry Russian gas to Central and Western Europe. Some 200 major enterprises operate in the extraction and processing of metals and in producing pipes and rolling stock.

These include the world largest steel plants making cast iron, steel, rolled stock, steel bars and pipes in Kryvyi Rih, Dnipropetrovsk, Zaporizhzhia, Donetsk, Makiyivka, Mariupol and other cities. The mechanical engineering sector includes enterprises involved in metals, oil, chemical, mining, power generating, railway stock (locomotives, passenger cars, tank-cars, and so on), road construction and vehicles (ships, aircraft, cars, urban transport), machinery and equipment for agriculture, the light and food industries, metal-cutting machine tools, and instrumentation.

Zaporizhzhia’s Motor-Sich plant manufactures aircraft engines for all the CIS. One of the world largest aerospace concerns, Pivdenniy, operates out of Dnipropetrovsk and Kharkiv’s turbines are known around the world. A high-capacity chemical plant is located in the city of Kalush. Much of Ukraine’s industry is concentrated in the Donetsk Basin, also called the Donbas, where there are rich deposits of coal and iron ore. In addition, the Kryviy Rih area is noted for its iron-ore mines, the Nikopol area for manganese ore, and the Zakarpattia region for petroleum, salt and natural gas deposits.

Ukraine’s iron and steel industries are very important segments in the economy. Other major industries include food and beverages, non-electrical equipment, fabricated metal products, and industrial chemicals. Manufactured items include tractors, motor vehicles, rubber tires, refrigerators, washing machines, televisions, radio and electronic equipment, aluminum products, textiles, and shoes. Sugarbeet processing, winemaking and distilling are the chief food processing industries. Kyiv is known for its flour and textile mills, sugar refineries, glassworks, and tobacco factories.

L’viv is known for its breweries and distilleries and Odesa for its shipyards. Ukraine has a sizable industry devoted to chemical products. This includes the manufacture of mineral fertilizers, sulfuric acid, coke products, synthetic fibers, caustic soda, and petrochemicals. The industrial plants are mainly in Kyiv, Korosten, Sumy, and Fastiv. The country’s industry includes more than 10,000 state and joint stock enterprises, and hundreds of private and community-owned SMEs that were established over the last decade in various industries. 4. Agriculture

Ukraine’s farm sector produces almost 9% of GDP and employs a fourth of the working population. Arable and farming areas constitute 40 million sq km. Planted crops account for 57% of total agricultural output. Among the dominant crops are wheat, corn, sugar beets, sunflowers, legumes, tobacco, vegetables, and fruits. Livestock farming includes cattle, pigs, sheep, horses, and so on. Annual wheat production in Ukraine is 35 to 45 million tonnes and total cereal production can be as high as 90 to 100mn t. Domestic needs, even if sharply increased, are about 35 to 40mn t.

, making as much as 60mn t. available for exports. This is one fourth of total world grain exports. Most of the grain exported from Ukraine is destined for the Middle East and North Africa. Export contracts for certain categories of agricultural products are subject to registration by the Ministry of Economics. The main items that can be exported from Ukraine subject to licensing and/or quotas where applicable and must be registered prior to their export from the country. The production of cereal and industrial crops tends to be the specialization of agricultural enterprises.

Major cereal crops include winter wheat, spring barley and fodder maize. Winter wheat appears to be the main crop for both private farms and agricultural enterprises. Wheat Wheat is grown throughout the country, but Ukraine’s central and south-central regions are the key growing areas. About 95% of Ukrainian wheat is winter wheat, which is planted in the fall and harvested during July or August of the following year. Ukraine produces mainly hard red winter wheat or bread wheat. In a typical year, some 80% of the domestic wheat crop is considered to be of milling quality according to Ukrainian standards.

In 2010 the production of wheat was 19. 8 mn tonnes which is 5. 3% less than in 2009. Barley Barley has been the main feed cereal in Ukraine for most of the past 10 years in terms of consumption. Spring barley accounts for over 90% of the barley crop, the main growing region being eastern Ukraine. Spring barley is planted typically in April and harvested in August. It is the crop most frequently used for the spring reseeding of damaged or destroyed winter harvests. The area is inversely related, to some degree, to the area of winter wheat.

Winter barley is the least cold-tolerant of the winter cereals and production is limited to the extreme south. In 2010 its production was 11. 5 mn tonnes (- 6. 2% to 2009). Maize Maize is the third most important fodder cereal in Ukraine. The planted area has increased despite a number of constraints, such as obsolete and inadequate harvesting equipment, the high cost of production, especially post-harvest drying costs, and pilferage. The main growing region is eastern and southern Ukraine, although rainfall in some oblasts in the extreme south is too low to support maize growth.

Maize is typically planted in late April or early May. Harvest begins in late September and is usually nearing completion by early November. Only 25–50% of total maize area is harvested for grain, the remainder being cut for silage, usually in August. In 2010 its production was 11. 3 mn tonnes (+ 9. 2% to 2009). Industrial crops include sunflower, sugar beet and rapeseed. Many surveyed farms in Kherson, Donetsk and Poltava oblasts specialize in the production of the first two crops. Sunflower seed Sunflower seed is Ukraine’s main oilseed crop. Production is concentrated in southern and eastern oblasts.

Sunflowers are typically planted in April and harvested from mid-September to mid-October. Because of a combination of high price, relatively low growing costs and high demand, sunflower has become one of the most consistently profitable crops. In 2009 its production was 6. 3 mn t or 111% compared with the previous year. Sugar beet Sugar beet is grown primarily in central and western Ukraine. The beet is planted in late April–early May and harvested from mid-September until the end of October.

Production has been declining since the early 1990s, mainly as a result of low profitability compared to growing cereals and sunflower. Between 1994 and 2009, planted areas dropped by 40% in Ukraine, to less than 320,000 hectares and production plunged from 28. 1mn t to 10mn t. However in 2010, production rose to about 17mn t which constitutes a growth of 70% over 2009. On family homesteads, the area sown with sugar beet increased during the same period. Sugar beet production requires a significant amount of manual labor and remains a viable option for small household farms with limited access to farm machinery.

As most cereal and industrial crops are produced by agricultural enterprises, private farms tend to focus on growing fruit and vegetables. The principal reasons for specializing in vegetable growing are the many possibilities for selling produce, either fresh or for processing, and the availability of manual labor instead of special equipment. In 2010, output was 7. 3mn t, a 12% decline over 2009. In recent years, the traditional zonal pattern for growing major agricultural crops has changed. Thus, for example, sugar beet, a crop grown predominantly in the forest-steppe zone, has advanced further south and is now grown by Kherson farmers.

However, the areas sown to these crops are not significant, and the yields are much lower than in the traditional growing areas. In 2010, area planted under sugar beet continued to shrink, with the exception of Rivne and Khmelnytskiy Oblasts, where a slight increase was registered. In southern regions, no sugar beet production was reported. The production of grain and oilseed crops is dominated by large agricultural enterprises that were established when Ukraine’s farm sector was restructured in April 2000. By contrast, nearly 90% of the country’s vegetables and virtually all of the potatoes are grown on private household plots.

State and collective farms were dismantled and farm property was divided among the farm workers in the form of land shares. Most new shareholders leased their land back to newly-formed private agricultural associations, under the leadership of a manager who was frequently, but not always, the director of the former state farm. 5. Services Ukraine’s service industry is one of the most promising branches of the country’s economy today. More than 40% of the country’s workforce is in this sector. The service industry’s share of GDP domestically is over 50%.

Over 2004-2010, this sector demonstrated an impressive pace of growth and strong profit margins. Annual turnover is currently $20bn and growth has been averaging 25% per year, with revenues rising an average of $1. 8bn monthly. Growing volumes of services rendered can be seen across all regions in Ukraine, mainly a result of the steady rise in real disposable incomes. In Ukraine, these high indicators are traditionally driven by transport, post and telecommunication, which account for nearly 60% of annual volumes of all services: nearly 30% comes from transport and the remaining 30% from post and telecommunication.

Relatively new segments of the service sector, such as real estate and legal services, already account for nearly 25%. In addition, transport and communications services account for 25–27% of added value for the entire industry. Trade and medicine, which have far lower turnover than transport services, account for 33% of added value in this sphere. The remaining 40–45% of profit is provided by property services, education, consulting and so on. The share of services provided to individuals constitutes 31% of all services rendered.

The most popular among such services are technical service and repairs (93%), education (89%), air transport (85. 0%), photographic services (82. 4%), various personal services (76. 5%), hotels and lodging (74. 1%). Services that are rendered abroad are a major part of Ukraine’s exports and a source of commercial capital in the country. Today, the export of services is about 10% of GDP. The main buyers of Ukrainian services in 2010 were Russia, the United Kingdom, Cyprus, the US, Germany, Switzerland, Belgium, Turkey and Canada.

The main sellers of services to Ukraine were Cyprus, the United Kingdom, Russia, Germany, the US, France, Austria, Switzerland, Turkey, Sweden, China and Poland. Ukraine’s main competitive advantages in services, especially on international markets, are inexpensive skilled labor and a convenient location. Ukraine’s geographic advantage is mainly important for transport networks, such as highways, railways, ports, airlines, and oil and gas pipelines. Ukraine renders transport services abroad mostly, while actively importing insurance, financial and advertising services.

The most attractive areas for foreign investors are wholesale trade and brokering, and property services. The share of foreign capital in these segments is the highest among services. Among the most popular services exported from Ukraine are transport (69. 5%) and various business, professional and technical services (12. 4%). The share of transport services among services imported to Ukraine is 20. 7%, government services are 14. 8%, professional and technical services 18. 4%, financial services 13. 7%, and royalties and licenses 6%. Exports of air transport services dropped by 14% in 2010, to $1.

06bn and financial services fell 17. 6% but pipeline transit services grew to $4. 3bn or 68% up from 2009. Computer services expanded by 18. 1%, royalties by 275%, and architectural services by 31%. The import of financial services declined by 15%, computer services by 5%, business, and professional and other technical services by 8%. The import and export of insurance services both rose in 2010. Ukraine has all the fundamentals in place for turnover in the service industry to continue to pick up pace in 2011-2012. This will be spurred in particular by the European Football Championships that are to take place in Ukraine in 2012.

The main segments that are expected to grow in this period include banking, retail, healthcare, and tourism—both resorts and tour operators who handle international travel for Ukrainian consumers. These are services regularly used by the middle class. Other promising segments include business-to-business (B2B) services such as consulting and auditing and IT services and communications, which constitute nearly a third of all services in developed countries. Ukraine is the world’s fifth biggest exporter of IT services and has the highest outsourcing market volume in Europe.

The country’s IT sector is showing the fastest-growing rates and is expected to exceed $1 billion in value in 2011. According to the annual review of IT outsourcing markets in 16 Central and Eastern European countries conducted by the CEE Outsourcing Association (CEEOA), Ukraine’s exports of computer software will exceed $1 billion in 2011, amounting to 10% of the total figure for the CEE region. Ukraine is the world’s fifth biggest IT services exporter and features the highest outsourcing market in Europe, estimated at $800mn in 2010.

The country continues to hold the 4th position in the world for the number of IT specialists, following the US, India and Russia. Annual turnover in the telecoms sector shows that it continues to lead this branch. The highest growth was in mobile communications, radio and television broadcasting and radio communication, and computer communication. The mobile sector remains the most interesting segment in Ukraine’s telecommunications market. The total number of mobile subscribers in the middle of 2011 was 55 million. Internet access has risen dramatically in Ukraine in less than a decade.

Today, nearly 11 million Ukrainians use internet services daily. The number of second and third-level domain names registered under Ukraine’s “. ua” internet domain was 547,775 in March 2011. Major international telecommunications companies are already represented in Ukraine. A number of strong domestic companies are also operating, such as Miratech, SoftLine, SoftServe, Infopulse, TelesensKSCL Ukraine, and TESSART. The development of fiber-optic communications lines with the introduction of CWDM and DWDM technologies and the growth in broadband access networks remain among the highest priority areas in the expansion of telecoms networks.

Ukraine has unique human resources suitable for the development of telecoms services. The country has its own history of developing the basic foundations of an information society. This includes a world-renowned cybernetics school, a concept and program for IT development that were drafted already at the beginning of the 1990s, the professional development of a wide range of ITC, math and cybernetics specialists, a variety of ICT manufacturing facilities, a broad-based IT-related regulatory and legislative base, and a slew of national information and analysis systems.

Every year, Ukraine’s colleges, institutes and universities graduate 50,000 IT specialists, including mathematicians. The country is fourth in the world after the US with 194,000, India with 145,000, and Russia with 68,000 certified programmers. More than 300 IT companies operate in Ukraine today, mostly in offshore software development. 30% have been doing business in this market for more than 10 years. In addition, there are nearly 250 small companies and independent programmer groups, whose share of the market is estimated at 40%.

The average salary of factory workers who are in the IT product and services export business ranges from $300 to $1,200 in Ukraine, while managers make between $800 and $2,000. These companies are mainly oriented on developing vertical decision-making in healthcare, manufacturing and commercial services. All this confirms that Ukraine has the necessary conditions for an optimistic assessment of the telecoms sector’s future. Experts emphasize that the market is still at the active formation phase and market leaders are aware of the need to consolidate forces in Ukraine and cooperate with international partners.

The massive brain-drain of IT specialists abroad has nearly stopped. Many are even returning and launching their own businesses in Ukraine. The main competitors in the battle for market share with Ukrainian developers are India, Russia, Romania, China and Belarus. Telecoms market players predict that Ukraine’s IT market will continue to grow in 2011. 1. Economic History Note Ukraine’s economy has historically been determined by such factors as its advantageous geographic location at the crossroads between Europe and Asia, an abundance of the most fertile topsoil called chornozem, a rich base of natural resources and a productive labor force.

Metals and minerals like coal, iron ore, gas, stone, sand and salt are abundant in Ukraine. Ukraine has 40 % of the world’s manganese ore, as well as the biggest deposits of ozocerite and sulfur in the world. The country also boasts the largest deposits of graphite in continental Europe. When Ukraine proclaimed independence in August 1991, it had one of the highest indicators for gross national income and also per capita industrial and agricultural production in the former USSR.

Ukraine once represented about 5% of global industrial output: 10% of its cast iron production, 9% of steel, and 8% of mined coal. By the 1980s, however, the soviet-style economy began to show considerable unbalance, with an over-emphasis on heavy industries and machine building. More than 80% of industrial manufacturing did not have a closed production cycle, and output of consumer goods was extremely low. From 1991-1994, Ukraine’s economy went into collapse. This transition period led to GDP plunging 40. 4% as hyperinflation in 1993 reached a record-high 10,256%.

By 1994, the government began to define a strategy for economic reform and mechanisms to overcome the economy’s deep crisis. This stage led to lower inflation, macroeconomic stabilization and a halt in industrial decline. Direct foreign investments increased by 5. 8 times in 1995–1998. A phase of economic stabilization and growth started in the first half of 1997, but was interrupted with the start of the Russian financial crisis in 1998. Growth slowly resumed in late 1999 with almost every economic indicator showing positive results.

After an initial decade of decline, Ukraine’s GDP grew 33. 1% over 2000–2003 and continued to grow 3-12% for five consecutive years. After the Orange Revolution in 2004, Ukraine entered a 3-year period of economic growth. The election of President Yushchenko was positively assessed by the international investors, who brought over US $31 billion in foreign direct investment into Ukrainian economy. 2005-2008 were the years of rapid economic growth in banking, construction, telecoms, retail, processing and other sectors.

Economic growth and the availability of mortgage lending spurred a boom in the construction industry and real estate development that led to an unprecedented rise property prices across Ukraine. Despite many hopes, the democratic leaders of the Orange Revolution did not manage to agree on main goals or a strategy of economic development for the country. 2005-2009 became years of political uncertainty, which grew considerably as the global crisis reached Ukraine in Q3 of 2008. In 2008, Ukraine’s economic growth abruptly slowed to 2. 1% y-o-y, pointing to a sharp contraction in Q4.

By the end of 2008, the country’s currency had lost nearly 60% of its value to the US dollar. Depreciation and the deep economic downturn undermined the stability of the banking sector. Fortunately, monetary and government officials began to actively address the weaknesses in the country’s banking system. In 2008, output of domestic machine-building products increased. But because of the crisis, sales volumes of engineering products for January-July 2009 in current prices amounted to only UAH 36. 1 billion, or 51. 5% less than in the same period of 2008.

Nevertheless, profitability of engineering enterprises in January-June 2009 was 5. 2%, which is better than the industrial average of 1. 7%. During the pre-crisis years, exports of key engineering products steadily rose: by 52. 7% in 2007 and 28. 5% in 2008; over January-July 2009, however it plunged 45. 4%. Having contracted 15. 1% in 2009, GDP is estimated to have bounced back only 4. 2% in 2010 and is forecast to grow between 4. 0% and 4. 6% in 2011. In 2008, the average price per sq m of residential space in Kyiv rose higher than US $3,800.

Office estate also became among the most expensive in the world with average monthly rent for Class A premises over US $120 per sq m. Ukraine’s economy remains burdened by excessive regulation, corruption, and lack of law enforcement, and while the government has taken steps against corruption and SMEs have been largely privatized,