Ukraine’s investment attractiveness index is gradually improving

Investment attractiveness index of Ukraine, according to the European Business Association (EBA), increased by 0.1 points to 2.96 in H2 2019 compared to H1 2019.

Yet, the index did not reach the level of H2 2018 (3.7 points).

However, attitudes of CEOs of EBA member companies, on the basis of which the index is calculated, gradually “started improving after the stressful start of the year — a period of the alignment of political forces in the country,” says Anna Derevyanko, the EBA Executive Director.

“It is good news that the Index is again close to a neutral area of 3 points (on a 5-point scale used by the EBA — GMK Center). This means that the business community probably realized that the new government would continue the course towards reforms and the European integration,” said Ms Derevyanko.

A survey of 122 CEOs showed that 39% of them called the investment climate neutral, 37% unfavorable and 17% attractive. However, in early 2019, 19% believed the investment climate to be attractive.

Negative factors in the opinion of CEOs included:

• corruption
• weak judiciary
• labor and capital outflows
• slow de-bureaucratization of the business process
• situation around the NBU and pressure from law enforcement agencies
• potential breakdown of cooperation with the IMF
• populism and turbo regime of the new government

Positive factors:

• gradual stabilization of the political situation
• launch of the land reform
• reform of tax and customs authorities
• introduction of concessions
• start of work of the High Anti-Corruption Court
• decline in inflation
• cancellation of limits on the repatriation of dividends
• increase in purchasing power

According to the results of H2 2010, the index reached its peak (3.4 points). Now it is at the level of 2016.