From the 2000s onwards, household consumption has been the primary driver of GDP growth in Ukraine, whereas the contributions from exports and investment have been inconsistent.
Figure 1 - Share of consumer spending in Ukraine's GDP, %
Source: https://be5.biz/makroekonomika/consumption_expenditure/ua.html
Figure 2 - Share of private investment in Ukraine's GDP, %
Source: https://be5.biz/makroekonomika/consumption_expenditure/ua.html
In the sectoral perspective, it is important to recognize the significance of both the industrial and agricultural sectors. Ukraine saw a 5.9% increase in industrial production in 2023, which followed a 37% decline in 2022. Government programs played a significant role in boosting infrastructure (26.6% increase in construction materials production), while the machine-building industry also saw positive growth (16.7% increase in 2023).
One factor limiting sustainable economic growth is the economy's inertia, which is evident in the increasing focus on exporting raw materials - in 2023, agricultural products accounted for 62% of Ukraine's total exports, up from 53% in 2022. Additionally, the economy faces risks due to the accumulation of external debt affecting the balance of payments. In light of this situation, reduced investment levels and the necessity to adjust budget spending to accommodate the rising social demands heighten the potential for prolonged economic instability.
Mobilization and large-scale movement of people resulted in a shortage of labor in Ukraine: there has been a decrease in job opportunities and an increase in unemployment since the conflict began. Nevertheless, there is currently an increasing trend in labor demand, which, according to the National Bank, is linked to the economic recovery and seasonal patterns. A lack of workers, particularly manual laborers, was observed in 2023, with a 20-25% increase from levels seen in 2021.
High turnover among employees largely creates the illusion of a thriving labor market. The pattern is seen as unofficial employment becomes more appealing for both employers (cutting costs on taxes) and employees.
Figure 3 - Nominal GDP per capita in Ukraine 2002-2023, USD
Economy of Ukraine
November 13 at 18:46 All articles
1. Long-term trends
From the 2000s onwards, household consumption has been the primary driver of GDP growth in Ukraine, whereas the contributions from exports and investment have been inconsistent.
Figure 1 - Share of consumer spending in Ukraine's GDP, %
Source: https://be5.biz/makroekonomika/consumption_expenditure/ua.html
Figure 2 - Share of private investment in Ukraine's GDP, %
Source: https://be5.biz/makroekonomika/consumption_expenditure/ua.html
In the sectoral perspective, it is important to recognize the significance of both the industrial and agricultural sectors. Ukraine saw a 5.9% increase in industrial production in 2023, which followed a 37% decline in 2022. Government programs played a significant role in boosting infrastructure (26.6% increase in construction materials production), while the machine-building industry also saw positive growth (16.7% increase in 2023).
One factor limiting sustainable economic growth is the economy's inertia, which is evident in the increasing focus on exporting raw materials - in 2023, agricultural products accounted for 62% of Ukraine's total exports, up from 53% in 2022. Additionally, the economy faces risks due to the accumulation of external debt affecting the balance of payments. In light of this situation, reduced investment levels and the necessity to adjust budget spending to accommodate the rising social demands heighten the potential for prolonged economic instability.
Mobilization and large-scale movement of people resulted in a shortage of labor in Ukraine: there has been a decrease in job opportunities and an increase in unemployment since the conflict began. Nevertheless, there is currently an increasing trend in labor demand, which, according to the National Bank, is linked to the economic recovery and seasonal patterns. A lack of workers, particularly manual laborers, was observed in 2023, with a 20-25% increase from levels seen in 2021.
High turnover among employees largely creates the illusion of a thriving labor market. The pattern is seen as unofficial employment becomes more appealing for both employers (cutting costs on taxes) and employees.
Figure 3 - Nominal GDP per capita in Ukraine 2002-2023, USD
