Ukraine gets USD 691 mln in net FDI in 1H15

The Ukrainian economy received USD 1,042 mln in foreign direct investment (FDI) into share capital in 1H15, according to an UkrStat report on Aug. 14. The outflow of share capital was USD 351 mln during this period. Despite the positive net FDI of USD 691 mln, the FDI balance fell 6.4% (USD 2.91 bln) YTD to USD 42.85 bln as of end-1H15, which UkrStat attributed to the exchange rate difference. In particular, the devaluation of the local currency ate away USD 3.54 bln from the FDI balance in 1H15.

Alexander Paraschiy: Net FDI inflow is very likely to increase in 2H15, as compared to the first half of the year, due to the expected privatization of large chemical and electricity assets in Ukraine. That said, we do not expect any increase in “genuine” foreign investment. As before, Ukrainian oligarchs will likely remain the major contributors to Ukraine’s FDI in the coming months.