At the end of 2023, 82% of small and medium-sized enterprises in Ukraine, which had suspended operations due to the full-scale invasion of Russia, resumed work. This is evidenced by data from a study of the impact of war on micro, small and medium-sized enterprises (MSMEs) in Ukraine from the UN Development Program, the Center for Economic Recovery and the Ministry of Economy, reports Ukrinform.
It is noted that during 2023, almost 91% of MSMEs that were forced to suspend operations in 2022 due to hostilities resumed work. By the end of the year there were just over 82%.
In addition, companies are gradually returning to the pre-war level of capacity utilization – on average they are now using them at 53.4%. By the end of this year, the surveyed businesses plan to increase this figure to 56%, and also, if there is demand, increase turnover by 50%.
Damage due to war
The majority of companies reported to researchers losses due to the war of up to $100 thousand. The greatest impact was experienced by the construction sector and the processing industry, the least impact was experienced by the agro-industrial and telecommunications sectors, as well as the service sector.
According to the study, enterprises in the east and south of Ukraine they suffered 1.5 times greater losses than in the west. Every second entrepreneur said that their business would not survive without government help. They argue that loans, employment programs, tax cuts and grants have become critical to survival.
Forecast for 2024
Forecast for 2024, MSMEs are cautiously optimistic. Among the main challenges for the current year affecting commercial activity, surveyed entrepreneurs name:
- unpredictable situation, low demand, labor shortage
However, companies do not plan further staff reductions, which indicates potential for economic renewal.
Recall
The Ministry of Finance wrote that in January 2024, business worsened its assessments of current results and prospects for its activities. This is evidenced by the business activity expectations index (IOD), which the NBU calculates monthly.
