The plan by Ukrzaliznytsia to raise freight tariffs by 37% could significantly impact Ukraine’s economy. According to calculations by the state enterprise Ukrpromzovnishexpertiza, such actions will lead to a reduction in gross domestic product by 1.18%, which amounts to ₴95.8 billion. At the same time, a decrease in export volumes of nearly 3%, or ₴97.8 billion, is expected.
This is reported by Business • Media
Potential Industry Losses from Tariff Increases
If the tariff increase is implemented, railway freight transportation for various types of products will become 26-31% more expensive. This, according to experts’ calculations, will result in a reduction in transportation volumes by 27 million tons annually and a decrease in production by 23 million tons.
The most significant reduction in production volumes is expected in the mining sector of metal ores — down by 5.38% (₴30.8 billion), as well as in the metallurgy industry — down by 6.9% (₴63.6 billion). The trade sector will also experience a notable decline — by 0.96% (₴21.5 billion), while the transport sector will lose 1.02% (₴10 billion).
Railways Remain Critically Important for Ukraine’s Economy
Experts note that the increase in railway tariffs will force Ukrainian producers to partially switch to road transport. However, for most cargo, the railway remains the only or nearly alternative option, and the possibilities for replacing this mode of transportation are extremely limited.
The initiative by Ukrzaliznytsia to increase freight tariffs by 37% could lead to a decrease in Ukraine’s GDP by 1.18%, or ₴95.8 billion, as well as a drop in exports of nearly 3%, or ₴97.8 billion, analysts from the state enterprise Ukrpromzovnishexpertiza calculated.