Page 41 - UKRRptMay19

The National Bank of Ukraine (NBU) estimated round-tripping foreign direct investment (FDI) at $0.5bn, or 20.6% of FDI to Ukraine in 2018 (an increase from $0.3bn, or 10.4% of FDI in 2017), the central bank reported in an April 3 press release.
“Round tripping” is a term to identify the investment flow, which is reported as FDI, but in fact involves just the return of domestic capital previously withdrawn from the country. To reach this estimate, the regulator distinguished the flows in, which the ultimate controlling investor was a resident of Ukraine.
In 2010-2018, round-tripping FDI amounted to $8.4bn, or 22% of the total FDI inflow to the country. In 2010-2013, the volumes of round tripping were the highest, reaching around one-third of net FDI. Cyprus, the Netherlands, Switzerland, and Austria are the leading sources of round-tripping operations with Ukraine, the NBU said.
“The reported volume of round tripping is likely to involve the part of the estimated $1.3bn that left the country during the economic collapse in 2014- 2015. The increase in round tripping points to some growing confidence related to business operations in Ukraine. Nevertheless, the volume of this capital is almost negligible given the huge demand for capital inflow needed to make structural changes in Ukraine’s economy,” Evgeniya Akhtyrko of Concorde Capital said in a note.
New foreign direct investment in Ukraine was $1.9bn in 2017, the State Statistics Service said. About one quarter, or $506mn, was from Cyprus, presumably offshore Ukrainian or Russian money. The next four sources were: Russia -- $396mn; the Netherlands -- $262mn; Britain -- $212mn; and Germany -- $119mn.
41 UKRAINE Country Report May 2019 www.intellinews.com