Structural changes in the Polish and Ukrainian economies against the background of other Central and Eastern European countries

The aim of this chapter is to present and discuss the structural changes in the GDP of Poland and Ukraine, as a consequence of the institutional changes mentioned in Chapters 1 and 2. This chapter gives an account of macroeconomic context analyzed in the following chapters. Between 1990 and 2017, the GDP share of the Ukrainian industrial sector was steadily declining. This trend was reinforced by political turmoil, variability of domestic demand, decline of international competitiveness, violations of free competition rules by various institutions, the unlawful enrichment of a very narrow social group and corruption. Over the same period, the average annual GDP share of the Polish industrial sector remained stable at a rate of 29%. At the end of 2017, the industrial sector share in the Polish economy was 29.5% and in the Ukrainian economy 23.3% (1991 - 54.5%). In the early 1990s the agricultural sector share in the Ukrainian economy was close to 25%, while the industrial processing sector accounted for a total of 80% of the total GDP produced. In 2017, the agricultural sector share in the Ukrainian GDP was 10.1%; in Poland it was 2.8%. Investment rates in Poland and Ukraine are lower than in the other countries of central and Eastern Europe. This is a negative factor in terms of international competitiveness and the development prospects of both economies. The difference between the investment rate in Poland and Ukraine and the countries of the region is partially due to the sectorial structure of their economies.