According to preliminary data from the NBU, in the first quarter of 2024, the influx of foreign direct investment (FDI) into Ukraine in 2023 amounted to $1,838 million. Chairman of the Tax Committee Daniil Getmantsev wrote about this in his telegram channel.
< img title="Since the beginning of the year, $1.84 billion of foreign direct investment has entered Ukraine — NBU " src="/wp-content/uploads/2024/07/0e871e65fdd963d6d505e531614e5001.jpg" alt="Since the beginning of the year, $1 has entered Ukraine, 84 billion foreign direct investments — NBU " />
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Investing in Ukraine
The lion's share (70%) of FDI inflows in the first quarter of this year is the reinvestment of income received by a foreign investor in Ukraine ($1,286 million). This is partly due to restrictions on cross-border transfers, including the withdrawal of dividends. At the same time, since May of this year, the NBU has somewhat weakened such restrictions as part of a broad package of currency liberalization.
Top 3 sectors by FDI inflow in the first quarter of 2024:
- Extractive industry – $530 million Trade – $493 million Financial sector – $256 million
As of the end of the first quarter. In 2024, accumulated FDI (stock) amounted to $55.79 billion. According to this indicator, we are now at the level of the first quarter of 2021 ($55.96 billion). However, this is still significantly (15%) less than in the last quarter before the full-scale war (Q4 2021 – 65.75 billion).
Compared to the countries of Central and Eastern Europe, the indicators of FDI inflow as a share of GDP, capital investment, and accumulated FDI per capita remain low.
According to UNCTAD, in 2023, accumulated FDI in Poland, which before the full-scale war was comparable to us in terms of population, amounted to $335.5 billion, while in Ukraine it was $55.1 billion, that is, it was 6 times more.
This suggests that the Ukrainian economy remains significantly underinvested.
Of course, a significant increase in FDI, especially green-field (from scratch), can be expected after the end of the war. This will be facilitated by Ukraine's status as a candidate for EU membership and the corresponding progress in reforms within the negotiation process – the path that Poland took, where FDI stock increased 20-fold from 1993 to 2022.
In this regard, Ukraine is not unique, which means it will be able to attract at least $15 billion in FDI annually, which will be necessary for recovery and sustainable development.
- Investments