Ukraine’s Internal Development

Over several consecutive years Ukraine’s economy has demonstrated one of the highest growth rates in Europe. Against the background of stable financial situation the exports are rapidly growing, the Ukrainian goods strengthen their competitive capacity on the domestic market; the volumes of investments and construction are growing, as do the volumes of consumption and household income.

The real DGP growth in January – June 2004 reached a record level of 12, 7% (9, 2% last year), the volumes of industrial output grew by 15,9%.

In the first five months of 2004 the exports of goods increased by 51,3% compared with the same period last year, the imports – by 32,5%. The foreign trade surplus totalled over $ 2 bln (almost $ 409 m in the same period in 2003).

Last year Ukraine reached considerable progress in implementation of tax and pension reforms, resumed the privatisation of big enterprises and improved the legislation in mortgage and land regulation and crediting. There was established the flat personal income tax rate of 13%; the corporate income tax rate was also reduced.

As a result of socially-oriented policy of the Government in January-May 2004 the nominal household income grew by 19, 7%, the real salary by 26, 7%.

Constructive dialogue between Ukraine and the international financial institutions, the implementation of the external debt payment schedule and the considerable potential of further economic growth resulted in upgrading of Ukraine’s credit rating by the leading international credit agencies.

Ukraine met in full the FATF requirements on fighting the money-laundering and was excluded from the organisation’s “black list” in February 2004.

The country’s economic achievements became possible owing to the formation of the coalition Government and its backing by the parliamentary majority.

One of the key priorities in the Government activity at present is the conduct of free, transparent and democratic presidential elections in accordance with the national legislation and the European norms and standards.