FDI to Ukraine totals USD 1.3 bln in 1H18

Foreign direct investment (FDI) to Ukraine reached USD
1.3 bln in 1H18, Ukraine’s State Statistics Service reported on Aug. 29. This
amount was calculated under its new methodology that includes data on
reinvestment income of Ukraine’s banks, based on estimates by the National Bank of Ukraine.

Around 60% of foreign investment was channeled to
financial and insurance activities. Other destinations of FDI included
wholesale and retail trade (9.6%), industry (8.2%), information technologies
and telecommunication (7.9%). Most of the investment came from Russia (35%),
the Netherlands (17%), and Cyprus (17%).

Evgeniya Akhtyrko: High geopolitical risks and poor rule of law (and capital protection)
continue to dissuade foreign investors from considering Ukraine. Foreign
investment in tangible production assets (industry) is very low. Meanwhile, the
high share of Russian capital in Ukraine’s FDI structure in 1H18 is mostly
related to the  recapitalization of Sberbank and VTB Bank in 1H18 for
around USD 315 mln (out of total USD 436 mln accounted as FDI from Russia).