Page 38 - UKRRptMar19

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
Ukraine net FDI grows $690mn in 2018 , but investment needs are ten-times higher
The stock of foreign direct investment (FDI) into Ukraine in 2018 grew 2.2% y/y to $32.3bn as of end-2018, or a net increase of $0.69bn, the State Statistics Service reported on February 28.
At the same time the increase in FDI in 2017 was revised upwards to $380bn while the 2014-2016 drop in FDI stock was reduced $22.5bn.
Gross 2018 FDI inflow amounted to $2.87bn, while the outflow was $0.97bn. The agency wrote off $1.22bn from inflows due to exchange rate fluctuations, omissions, and changes in classification. In 2017, gross FDI inflow amounted to $2.51bn, while the outflow was $0.76bn.
In 2018, the Netherlands ($1.2bn), Cyprus ($0.5bn), and Russian Federation ($0.5bn) were the leading sources of investment to Ukraine in 2018. The top recipients were the finance ($1.2bn), trade ($0.6bn), and real estate ($0.4bn) sectors.
Ukraine’s foreign direct investment totalled $2.5bn in 2018 , reports the National Bank of Ukraine. About $1.5bn of the total went into the real sector. For an economy the size of Ukraine’s -- $125bn – foreign direct investment should be five times higher, over $12bn economists say.
Ukraine's Finance Minister Oksana Markarova says Ukraine needs over $10bn in investment annually to accelerate its economic growth, which is 4-5 times up from the current investment. "Now we are attracting $1.5bn - $1bn - $3bn a year. This is not enough for a country and economy like ours. These investments should be plus $10bn," she told a Ukrainian TV channel on February 18 as cited by Unian . According to the minister, effective privatization of state property and a better business climate are required to attract such investment. The foreign direct investment in Ukraine's economy in 2018 was estimated at $2.5bn, with 60% of this amount channelled into the real sector, according to the National Bank of Ukraine (NBU).
Mergers and acquisitions increased by 78% in 2018 year over year, to $1.8bn, KPMG reports in its annual Ukraine M&A Review. The number of deals increased by 19%, to 80. Foreign investment increased by 47% to
38 UKRAINE Country Report March 2019 www.intellinews.com