Ukraine intends to increase the inflow of foreign direct investment (FDI) by 2025 to $15 billion per year, while at the end of 2020 their outflow amounted to $420 million, and in 2021 the National Bank predicts a recovery in FDI inflows at the level of $3 billion.
The targets are enshrined in the National Economic Strategy 2030 posted on the government’s website.
According to it, Ukraine should at least double its real gross domestic product (GDP) in 10 years.
Target indicators are also the following: an increase in exports to $150 billion compared to $49 billion in 2020, an increase in labor productivity by at least 1.7 times, and a decrease in the unemployment rate from 8.6% to 6% in 2030.
As indicated in the strategy, the share of the public sector of the country’s banking system by 2030 should be reduced to 25% from the current 54%.
At the same time, the document contains the intention of the Ukrainian government to keep the state budget deficit at the level of 2-3% of GDP, and the ratio of public debt to GDP at 30-40%.
As for the trade priorities of the state until 2030, here the document sets out plans to increase the share of small and medium-sized businesses of total exports to 40%.
International trade should also be facilitated by the reduction of the time for passing customs procedures to average European indicators, as well as the synchronization of the work of the customs authorities.
In addition, the National Strategy provides for an increase in the share of investment imports by at least 30% by 2030.
Some 4.6% of foreign direct investment (FDI) companies in Ukraine produce 34.9% of gross value added (GVA), according to a survey conducted by the German Advisory Group and Ukraine’s Institute for Economic Research and Policy Consulting. “Some 4.6% of FDI companies in the non-financial sector employ 20.4% of salaried employees and produce 34.9% of GVA,” expert of the German Advisory Group Ukraine David Saha said while presenting the survey during a press conference hosted by the Interfax-Ukraine News Agency on July 12, 2018.
He added that the average monthly labor costs per employee of FDI companies were 57% higher than that of domestically owned enterprises.
“With the help of the IMF methodology we evaluated the amount of foreign investment in Ukraine at $27.5 billion in 2016. This is $650 per Ukrainian individual, while in Belarus this index is $2,000 and in Estonia – $14,000,” he said.
In turn, Acting Finance Minister of Ukraine Oksana Markarova noted that the government expected intensification of foreign investment due to privatization as well as improvement of business climate for both foreign and Ukrainian companies.
“We’ve managed to return Ukraine to the investment map over the recent year and a half. Numerous global brands, which earlier were just scrutinizing Ukraine, either have entered Ukraine, like Fujikura or a cluster of German companies in western Ukraine, or have announced about their plans to enter the Ukrainian market,” Markarova said.