Page 31 - UKRRptSept18

5.3 FDI
FDI
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 FFF
Net FDI (US$bn) 9.2 9.9 4.7 5.8 7 7.2 4.1 0.3 2.9 3.4 4.3 4.3 4.3
Net FDI (% of 6.4 5.4 4.1 4.2 4.3 4.1 2.3 0.2 3.3 3.7 4.3 3.9 3.5 GDP)
C/A bal. + net FDI 2.8 -1.6 2.6 2 -2 -4.1 -6.9 -3.3 3.1 0.3 1.6 -0.3 -0.1 (% of GDP)
Source: ICU
Russia became the largest investor in Ukraine in the first half of 2018 , according to data released by Ukrstat on August 30. Despite the de facto state of war between the two countries, their economies remain joined at the hip and business continues. In the first half of 2018 Russia has invested $436mn into Ukraine, or 34.6% of the total $1.26bn of foreign investment -- more than any other country, according to the State Statistics Service of Ukraine, Vedomosti reported. Cyprus was the second largest investor ($219mn), followed by the Netherlands ($208mn), Austria ($59mn), Poland ($54mn), France ($47mn) and Great Britain ($43.4mn). The bulk of the money goes into banking and insurance ($750mn or 60%) as despite regulatory restrictions imposed by the National Bank of Ukraine (NBU) on Russian banks, Russian banks remains an important part of the local financial sector. Banking and insurance investments take the lion’s share followed by trade (10%), industry (8.2%) and IT (8%).
However, the numbers are deceptive . Large amount of new Russian investments is actually due to the accounting of debt to equity conversions by Sberbank and VTB ($406m or 92%). Ukrainian sanctions forbid them to repay any debts to parent banks leaving little option but turn
31 UKRAINE Country Report September 2018 www.intellinews.com