Business leaders see slight growth of Ukraine's Investment Attractiveness Index in 2024
MOSCOW. Nov 7 (Interfax) - Ukraine's Investment Attractiveness Index, calculated by the European Business Association (EBA) has reached 2.49 points out of 5 this year, which is 0.05 points higher than in 2023, Ukrainian media said, citing information on the EBA website.
Ukraine's Investment Attractiveness Index was almost the same in the second half of 2022, standing at 2.48 points versus 2.17 points in January-July 2022, the EBA said.
"Despite the challenging business environment, investment climate assessments indicate a slight improvement, reflecting companies' adaptation. Notably, the shadow economy emerged as a significant negative factor this year, highlighting an intensified call for action against the shadow sector amid rising taxes for legitimate businesses," EBA Executive Director Anna Derevyanko was quoted by the statement as saying.
The percentage of business leaders considering Ukraine's investment climate as unfavorable has decreased from 84% last year to 79% in 2024, with the number of those describing it as extremely unfavorable steadily dropping from 53% in 2022 to today's 20%, the association said. A neutral stance on the current investment climate was taken by 12% of top executive, up from 7% in 2023, while 9% view it as favorable.
Assessments of the investment climate dynamics remain unchanged from last year. Nearly half of the respondents (49%) believe that the investment climate has worsened, 39% see no significant changes, and 12% believe that it has improved.
The proportion of companies already operating in the market and planning to continue investigating increased from 57% in 2023 to 70% this year.
Meanwhile, 17% of them believe it would be beneficial for new investors to enter the Ukrainian market, compared to 32% in 2023 and 17% in the second half of 2022.
However, 49% of CEOs expect the investment climate in Ukraine to continue to worsen over the next six months, 33% do not expect any changes in this period, and 18% hope that it will improve, EBA said.
The outlook within their own sector is similar, with 44% of respondents expecting the situation to worsen, 43% thinking that it will remain the same, and 13% expecting it to improve.
According to EBA, the crisis remains the top negative factor affecting the country's investment climate, followed by corruption, a weak judicial system, the shadow economy, and damage to the Ukrainian energy system.
Eighty-one percent of those surveyed also mentioned forex restrictions as a factor denting Ukraine's investment appeal.
As regards positive factors, business leaders cited Ukraine's EU candidate status, the 'transport visa-free regime" with the EU, digitalization of public services, and integration into the unified European electricity system.
Slightly more than half (54%) of companies surveyed by EBA have reported losses due to the crisis. Twenty-five percent of them have already appealed to law enforcement agencies, and another 11% plan to do so. Three percent have sought recourse through national courts and the same number through international courts.
The association polled 80 top managers of major international and Ukrainian companies, including 39% representing medium-sized businesses, 38% large companies, and 23% small businesses.
EBA has been conducting the Ukraine Investment Attractiveness Index survey since 2008. The index has never reached the positive zone of above 4 points since the measurements began.
