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Capital investments in Ukraine contract by 11.1% y/y to UAH 248bn (USD 28bn) in 2013.

February 26, 2014

The volume of capital investments in Ukraine contracted by 11.1% y/y to UAH 248bn (USD 28bn), the State Statistics Service has announced. The largest volume of capital investment was registered in Kyiv-UAH 64.1bn (down by 4.8% y/y), Donetsk-UAH 46.9bn (down by 20.4% y/y), and Dnipropetrovsk regions-UAH 20.5bn (down by 6.2% y/y).

The largest volume of investments was channeled in industry-UAH 101.9bn, out of that UAH 23.2bn was sent into mining industry, and UAH 43bn in processing industry. Moreover, UAH 43.4bn were invested in the construction industry, while investments in agriculture reached UAH 16.5bn.

Investments from state budget amounted to UAH 6.2bn (2.5% of total volume), local budgets-UAH 7bn (2.8%), own funds of enterprises and organizations-UAH 157.1bn (63.4%), credits-UAH 36.7bn (14.8%), public funds for the construction of their own apartments-UAH 5.9bn (2.4%), foreign investors channeled UAH 4bn (1.6%), other sources of financing-UAH 9.1bn (3.7%).

Foreign direct investments (FDI) in Ukraine in 2013 amounted to USD 2.86bn compared to USD 4.13bn in 2012, the State Statistics Service has announced. Foreign investors injected USD 5.7bn in the Ukrainian economy in 2013 (USD 6bn in 2012), while they withdrew USD 2.85bn (USD 1.26bn). The total amount of investments made in Ukraine as of the end of 2013 stood at USD 58.16bn, which was USD 1,284 per capita.

FDI made by European Union countries in Ukraine amounted to USD 44.42bn (76.4% of total equity capital), CIS members invested USD 5.0435bn (8.7%), while other countries injected USD 8.69bn (14.9%). Investment came from 136 countries.

The top ten investor countries accounted for almost 83% of total FDI. In particular, the British Virgin Islands boosted investment in Ukraine by 0.7pps (from 3.6% to 4.3%), Cyprus by 0.6pps (from 32.1% to 32.7%), Russia by 0.5pps (from 6.9% to 7.4%), the United Kingdom by 0.1pps (from 4.6% to 4.7%), and the Netherlands by 0.2pps (from 9.4% to 9.6%). At the same time, Austria reduced FDI in Ukraine by 0.6pps (from 6.2% to 5.6%) and Germany by 0.3pps (from 11.1% to 10.8%).

Up until recent events, Ukraine was making relatively steady progress according to the leading rankings, but many challenges remain to be addressed. The World Bank's ease of Doing Business 2013 ranked Ukraine at 137 of 185 countries up 15 places from 2012 while the World Economic Forum Global Competitiveness Report Ranked Ukraine 73 of 144 up 9 places from 2012.

With the new government being formed and the presidential elections in May, if Ukraine makes progress with reforms, the capital investments may start increasing already in 2014.

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Source: IntelliNews - Weekly Reports

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