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Ukraine’s investment attractiveness index has recovered to “covid” value  

15/ 12/ 2022
  The integral indicator of the Investment Attractiveness Index of Ukraine recovered slightly to 2.48 points in the second half of 2022, which is comparable to the values of 2020 during the active phase of the Covid-19 pandemic. These are the results of a new wave of an expert study conducted by the European Business Association. It should be reminded that in the first half of 2022, the Index fell by half a point and amounted to 2.17 points out of 5 possible. View the presentation The assessment of the current investment climate remains the lowest among all components of the Index. Half of the top managers consider the investment climate rather unfavourable. Over six months, the number of those who consider the investment climate to be extremely unfavourable has slightly decreased from 53% to 37%. At the same time, 8% of directors assess the current investment climate as neutral, and another 5% consider it favourable. The assessment of the investment climate dynamics for the last six months has slightly softened compared to the previous period. Although 45% observe negative dynamics, 33% believe that the business climate has not changed significantly, and 22% report its improvement. Over the next six months, 32% expect further deterioration of the situation, and 46% believe that the investment climate will not undergo significant changes. At the same time, 22% of top managers predict an improvement in the situation in the first half of 2023. Despite the war, 99% of EBA companies plan to continue operating in the Ukrainian market in 2023, and 63% are going to invest in Ukraine even in wartime. At the same time, only 12% believe that it will be profitable for new investors to enter Ukraine. Thus, CEOs talk about investment plans for 2023, primarily to support their own business – in salaries, taxes, sustainable development, digital, internal processes, energy efficiency, and logistics. The most popular sectors for investment remain agriculture, IT, pharma, transport, and FMCG. There are entrepreneurs who have plans to invest in the military/defence sector. Russias full-scale military aggression against Ukraine continues to top the list of factors negatively affecting the investment climate, followed by attacks on the Ukrainian energy system and corruption. Among the few positive changes, business leaders highly assessed the granting of the EU candidacy to Ukraine, the abolition of duties and quotas on Ukrainian exports, and the transport visa-free regime with the EU. Anna Derevyanko. EBA Executive Director. We see certain mitigation of negative sentiments on the investment climate, which are improving mainly due to optimistic business expectations for the next six months. Even though the situation remains extremely difficult, most companies have found a certain point of equilibrium in which they ensure the continuity of their work as a minimum, and profitability and development as a maximum. The level of flexibility and adaptability of our business is extremely high, as well as the resilience and loyalty to Ukraine. HOW WE MEASURE THE INDEX The European Business Association has been conducting the “Investment Attractiveness Index of Ukraine” survey since 2008. Throughout its history, the Index has never reached a positive zone – above 4 points. Altogether, 100 directors of the largest international and Ukrainian companies took part in this wave of the survey.

The integral indicator of the Investment Attractiveness Index of Ukraine recovered slightly to 2.48 points in the second half of 2022, which is comparable to the values of 2020 during the active phase of the Covid-19 pandemic. These are the results of a new wave of an expert study conducted by the European Business Association. It should be reminded that in the first half of 2022, the Index fell by half a point and amounted to 2.17 points out of 5 possible.

View the presentation

The assessment of the current investment climate remains the lowest among all components of the Index. Half of the top managers consider the investment climate rather unfavourable. Over six months, the number of those who consider the investment climate to be extremely unfavourable has slightly decreased from 53% to 37%. At the same time, 8% of directors assess the current investment climate as neutral, and another 5% consider it favourable.

The assessment of the investment climate dynamics for the last six months has slightly softened compared to the previous period. Although 45% observe negative dynamics, 33% believe that the business climate has not changed significantly, and 22% report its improvement. Over the next six months, 32% expect further deterioration of the situation, and 46% believe that the investment climate will not undergo significant changes. At the same time, 22% of top managers predict an improvement in the situation in the first half of 2023.

Despite the war, 99% of EBA companies plan to continue operating in the Ukrainian market in 2023, and 63% are going to invest in Ukraine even in wartime. At the same time, only 12% believe that it will be profitable for new investors to enter Ukraine.

Thus, CEOs talk about investment plans for 2023, primarily to support their own business – in salaries, taxes, sustainable development, digital, internal processes, energy efficiency, and logistics. The most popular sectors for investment remain agriculture, IT, pharma, transport, and FMCG. There are entrepreneurs who have plans to invest in the military/defence sector.

Russia’s full-scale military aggression against Ukraine continues to top the list of factors negatively affecting the investment climate, followed by attacks on the Ukrainian energy system and corruption. Among the few positive changes, business leaders highly assessed the granting of the EU candidacy to Ukraine, the abolition of duties and quotas on Ukrainian exports, and the “transport visa-free regime” with the EU.

Anna Derevyanko EBA Executive Director
We see certain mitigation of negative sentiments on the investment climate, which are improving mainly due to optimistic business expectations for the next six months. Even though the situation remains extremely difficult, most companies have found a certain point of equilibrium in which they ensure the continuity of their work as a minimum, and profitability and development as a maximum. The level of flexibility and adaptability of our business is extremely high, as well as the resilience and loyalty to Ukraine.

HOW WE MEASURE THE INDEX

The European Business Association has been conducting the “Investment Attractiveness Index of Ukraine” survey since 2008. Throughout its history, the Index has never reached a positive zone – above 4 points.

Altogether, 100 directors of the largest international and Ukrainian companies took part in this wave of the survey.

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