Ukraine FDI flows out in 2Q13

Ukraine’s net foreign direct investment (FDI) turned into outflows (USD 412 mln) in 2Q13, according to state statistics reported on August 14. It’s the first quarter of outflows since the 2008 financial crisis, according to state data.

Alexander Paraschiy: It’s no surprise to see money leaving Ukraine. Outflows are a natural consequence of an overregulated economy, poor protection of property rights and escalating tax pressure. To make matters worse, Ukrainian oligarchs – who are the main investors in Ukraine – are expected to abstain from bringing money into the country during the vicious pre-election season that begins in early 2014.