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Investment Report for Ukraine

Economic forecast for Ukraine

The Ukrainian economy has grown at a robust rate over the past few years. The Ukraine is blessed with vast natural resources as well as a strategic location between Western Europe, Russia and the Middle East. Ukraine is the second largest country in Europe. Larger than France and Germany. Ukraine has over 1,700 miles (2,782 km) of warm water coastline along with some of the richest farmlands in the world.

 

Currently a large discrepancy exists between Ukraine's direct foreign investment and its overall economic potential. Poland received 20 times the direct foreign investment of Ukraine for 2004. This is remarkable considering that Poland is less than 1/2 the size of Ukraine with far fewer natural resources at its disposal and no warm water ports or beach resorts. Below is a chart comparing Poland's average real GDP growth over the past 12 years to that of France, Germany, Japan, the United Kingdom and the United States. The current state of the Ukrainian economy is similar to that of Poland's 12 years ago. If Ukraine's economic perform can match that of its smaller neighbor then we can expect to see similar GDP growth rates.

 

The chart below illustrates how the Ukrainian economic rate of growth has out paced that of France, Germany, Japan, Poland, the United Kingdom and the U.S. over the last 5 years. With forecasted events such Ukraine's acceptance into the WTO, NATO and the EU still on the horizon, Ukraine's economy should be able to sustain a healthy rate of growth for the foreseeable future.

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The following important economic developments are forecast to take place within the coming year:

  • Continued structural reform to encourage free trade.
  • Wholesale reforms in state administration to help curve corruption.
  • Continued growth in direct foreign investment.
  • Continued growth in tourism.
  • Decrease in the country's budget deficit.
  • Decline in PPI and CPI rates.
  • Stabilization of the Ukrainian currency. (The Hryvnia)
  • Admission into the World Trade Organization.
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