The year 2008 will be remembered as yet another one when business boomed with many bright spots. But the decade-long growth spurt ultimately gave way and was overwhelmed by economic gloom and doom.

1Economic growth ends in recession

Ukraine’s impressive decade-long economic growth spurt came to an abrupt halt this year giving way to what is expected to be a painful recession. It all started with the worldwide credit crunch earlier this year, culminating with this autumn’s global financial crisis. The collapse of world prices on steel, Ukraine’s major export, and a widening current account deficit have sent Ukraine’s currency into a tumble, in turn raising the prospect of defaults and banks going bust.

For the first time in a decade, Ukraine was forced to turn to the International Monetary Fund, which granted a whopping $16.4 billion standby loan to stabilize the country’s financial system.

More pain, including layoffs, await next year as industrial production plunges.

2Inflation spirals, reaches 25 percent

A third stiff price hike on natural gas from Russia, coupled with a consumer lending boom and monopolized price fixing in some business sectors, triggered spiraling inflation in Ukraine. While inflation is expected to cool off a bit next year due as consumption tapers off in recession, Ukraine managed this year to post the highest annual rate of inflation in Europe, estimated between 20 and 25 percent.

3Record harvest offers glimmers of hope

Ukraine’s notoriously rich black soil bore fruit this year, producing a record harvest of about 54 million tons of grain, double last year’s crop. The huge crop offers a glimmer of hope in a year that has been clouded with economic ills. Exports from this huge crop surplus will to an extent compensate for plummeting exports of steel, Ukraine’s main source of hard currency. Looking ahead, the hope is that when agricultural land privatization is sanctioned, billions of dollars of fresh investment will pour into possibly enough to triple harvests and establish Ukraine as an agricultural powerhouse.

4Billionaires take a beating in downturn

Ukraine’s multi-billionaires have not escaped the wrath of the economic ills. With stocks tumbling, demand for steel waning and credit markets frozen, the asset value of billionaires such as Rinat Akhmetov, Ukraine’s richest, are in a nose-dive. According to recent estimates, Akhmetov’s net worth has halved from about $30 billion in early 2008. In 2007, Ukraine’s youngest billionaire, Kostyantin Zhevago, rushed to London floating his iron ore company Ferrexpo. It cost him dearly. In 2008, after Ferrexpo’s stock plummeted, investors who lent Zhevago cash taking shares as collateral exercised a margin call. Zhevago lost 25 percent of the company. More losses will pile up for Ukraine’s billionaires if banks go bust next year.

5Ukraine, Russia brace for repeat gas war

The energy showdown between Ukraine and Russia remained in high gear this year. Still adjusting to three stiff price hikes on natural gas in as many years, Kyiv and Moscow are bracing for yet another New Year's gas price and debt standoff. Russia has warned that if Ukraine doesn’t pay its debts, it will cut off supplies, raising the prospects of yet another disruption in supplies to European markets. The stakes are perhaps higher this year, as both countries are also struggling with the aftermath of the global financial crisis. Prime Minister Yulia Tymoshenko hopes to remove shadowy middlemen companies from the multi-billion-dollar gas trade between Ukraine, Russia and Central Asian producers. But debt arrears and her escalating rivalry with President Victor Yushchenko has complicated talks. Russia is, meanwhile, playing Ukraine’s leaders off one another as part of a traditional game of divide-and-conquer.

6Privatization sinks into deep freeze

As in previous years, Ukraine squandered a huge opportunity to raise billions of dollars in badly-needed revenues through privatization of prized assets such as state telephone company Ukrtelecom, power utilities, Odessa Portside plant and other assets. Fearful that his rival, Prime Minister Yulia Tymoshenko would use proceeds to win voter support ahead of a presidential contest with social handouts, President Victor Yushchenko essentially froze privatization. Ukraine could have used the cash today to soften the blow of the global financial crisis and pending recession. Even if privatization kicks off next year, and that's a big if, the collapse of asset valuations means the country will raise only a tiny fraction of what it could have collected for its remaining treasures.

7Record foreign direct investment pours in

While 2008 will most likely be remembered as the year the recession hit, it was, ironically a record year for Ukraine in terms of foreign direct investment inflows. Official figures show that some $8-9 billion dollars in fresh FDI poured in this year, bringing the total inflows since independence to nearly $38 billion. This is still far shore of the $100 billion-plus that Central European countries have attracted, but big progress for Ukraine, which in its first decade of freedom attracted less than $10 billion. Inflows have sharply picked up after the Orange Revolution slapped Ukraine onto the radar screen of investors. Unfortunately, inflows are expected to fall next year.

8Arrival of low-cost airlines popular

With their pockets increasingly squeezed by inflation, the arrival of low-cost airlines offers a glimmer of hope for many traveling Ukrainians. Hungary’s WizzAir was the first to launch so-called low cost airline services in Ukraine. Others followed, offering domestic airfares as low as $30 and competitive flights to Europe. The arrival of new players onto a market long dominated by a handful of passenger carriers is expected to fuel competition, bringing cheaper tickets and more value to customers.

9 Kyiv joins World Trade Organization

After more than a decade of tough negotiations and stonewalling by Ukrainian lawmakers on adopting necessary legislation, Kyiv was finally accepted into the World Trade Organization this year. The achievement promises to open up access to markets for the country’s exporters, while simultaneously lifting import barriers for WTO members eyeing Ukraine’s vast market of 46 million citizens. Ukraine’s ability to join the WTO ahead of its bullying northern neighbor, Russia, will also yield some rare leverage. Russia will need Ukraine’s approval and need to make trade concessions to be accepted into the WTO.

10Murky standoff in Black Sea dispute

Houston-based Vanco Energy won tender in 2006 to explore and produce hydrocarbons on a vast 13,000 kilometers field on Ukraine’s Black Sea coat. The project was intended to diversify Ukraine’s source of energy, cutting down on increasingly costly oil and natural gas imports from Russia. But like many things in Ukraine, this strategically important project has gone sour. Scandal erupted when news broke that Ukraine’s richest man, Rinat Akhmetov, and a group of secretive investors with possible Russian roots had owned the majority stake. It’s no surprise that Prime Minister Yulia Tymoshenko cancelled the project, whose fate will depend on a ruling by international arbitrators.