A third of Ukrainian industry is not working due to high risks

ULIE recommends the government to single out priority issues to be resolved and formalize them in the Emergency Action Plan

More than 30% of the industry in Ukraine does not work due to the war and destruction caused by the armed aggression of the Russian Federation. So far, the prerequisites for a significant improvement in the situation in industrial production are not visible.

Ukrainian League of Industrialists and Entrepreneurs (ULIE) have such data.

In the conditions of sharp changes in the regulatory policy in the financial sphere (increase of the NBU discount rate to 25%, devaluation of the hryvnia), difficult access to credit resources, the ULIE does not yet see the prerequisites for a significant improvement in the situation in industrial production.

“Other barriers are disruption of supply and distribution chains, partial loss of foreign markets, shortage of skilled labor,” said the findings prepared by the business association for the government.

ULIE recommends the government to single out the priority issues to be resolved and formalize them in the Emergency Action Plan, without waiting for the implementation of the Recovery Plan of Ukraine and the receipt of foreign investments for these purposes.

“Most of the decisions can be taken already now, moreover, they do not require significant expenses from the state budget,” the ULIE notes.

For example, the state already owes exporters several tens of billions of hryvnias in VAT refunds. Moreover, the payment process is irregular and unpredictable. Thus, in July, the Ministry of Finance almost did not refund VAT to exporters – only UAH 600 million. At the same time, 9.5 billion UAH of VAT was returned to exporters in June. In August, farmers complain that the system practically does not work for them, and the consequence is the absence of a significant part of working capital, which agricultural producers could count on.

To develop an agreed strategy, the business union, as well as the Anti-Crisis Expert Staff created under it, recommend holding a meeting of the Verkhovna Rada Committee on Economic Policy with the participation of the Office of the President, the Cabinet of Ministers, the National Bank, industrialists and experts.

ULIE considers there is a real danger of stopping production in a number of energy-intensive sectors, if the necessary measures are not taken to pass the winter period.

As GMK Center reported earlier, at the end of June, the ULIE and the Anti-Crisis Council of Public Organizations spoke out against a sharp increase in tariffs for freight rail transportation.