Ukraine FDI slumps 31% in 2013
17 February 2014
Ukraine’s Foreign Direct Investment (FDI) inflow plunged 30.7% yoy to USD 2.9 bln vs. USD 4.1 bln a year ago, according to state statistics released on February 14.
Alexander Paraschiy: Falling investment activity in Ukraine has been a natural consequence of poor economic policy, corruption and growing political problems, making the country utterly unattractive for investment. To make matters worse, 75% of the reported FDI (USD 2.2 bln out of USD 2.9 bln) came from well-known offshore financial havens (Cyprus, the British Virgin Islands and the Netherlands). So these are the repatriated funds of Ukrainian oligarchs, not foreign investments.
In light of this trend, we do not see any improvement in FDI in 2014. The current political crisis will be exacerbated by the approaching March 2015 presidential elections, promising a prolonged period of uncertainty that won’t be a friendly environment for FDI. What’s more, the approaching currency crisis will cause many businessmen to abstain from wiring foreign cash to Ukraine.
