After a prolonged period of uncertainty and increasing economic challenges, the Ukrainian investment climate is expected to further deteriorate in 2025. According to the National Bank of Ukraine (NBU), the volume of foreign direct investment (FDI) in the country decreased by a quarter compared to the previous year, amounting to $3.3 billion. This trend indicates a low level of interest from foreign investors, particularly due to the lack of new players in the market and a high level of reinvestment of existing capital.
This is reported by Business • Media
In the first two months of 2025, the inflow of foreign investment into the country totaled only $351 million, which is 3.3 times less than in the same period of the previous year.
“While the authorities report on reforms, the real economy is crying out for help. In the first two months of 2025, the inflow of foreign direct investment into the country was only $351 million. This is 3.3 times less than in the same period of 2024. And this is not a statistical error, but a significant drawback for the state’s economic policy,” emphasized economic expert Daniil Monin in a comment to GMK Center.
The reasons for this decline include a reduction in reinvestment of profits by foreign investors, a drop in capital investments in trade credits by affiliated companies, and low activity from foreign players regarding capital participation.
Impact of War and Economic Situation on the Investment Climate
The situation in Ukraine largely determines the level of the country’s investment attractiveness. According to the European Business Association (EBA), the investment climate index in 2024 slightly increased to 2.49 out of a possible 5, indicating a lack of significant changes. A survey of business sentiment shows that 79% of business leaders consider the investment climate in the country unfavorable, while 49% believe it is even worse compared to the previous year. The war remains one of the main factors hindering investment development, and over time its negative impact is only worsening.
This is also confirmed by issues in the mining and metallurgy sector. For instance, the Canadian company Black Iron has been trying to launch the Shymanivske deposit in Kryvyi Rih since 2010 but has yet to receive permits to begin operations.
“We reminded the Ukrainian government that there are agreements on the encouragement and mutual protection of investments between Ukraine and the United Kingdom, as well as between Ukraine and Switzerland. According to the procedure, the Ukrainian government has three months to resolve the situation and compensate for the damages caused to investments. If this is not done, there is a possibility to appeal to arbitration in Stockholm or Vienna,” commented Lucio Genovese, chairman of the board of Ferrexpo.
At the same time, negative cases are also being recorded in the country, such as asset seizures and changes in the legislative framework that undermine the trust of foreign investors. For example, in March, the Pechersk Court transferred 49.5% of the Poltava Mining and Processing Plant to the Asset Recovery and Management Agency (ARMA), which caused outrage among business representatives and international investors.
Prospects and Challenges for Ukrainian Business
It is expected that until the end of active hostilities and the signing of a peace agreement, the investment situation will remain negative. According to forecasts from the International Monetary Fund (IMF), a revival of investments in the country is not expected until at least the end of 2025. Accordingly, significant improvements in the short term are not anticipated, and most surveyed experts and entrepreneurs point to a further deterioration of the investment climate in 2025. The main issues remain Russian aggression, corruption, an imperfect judicial system, the shadow economy, and attacks on the country’s energy system. At the same time, the lack of clear signals from the government regarding reforms and security guarantees complicates the attraction of new investments and hinders economic recovery.