The Ukrainian economy is facing a prolonged outflow of investments, which has significantly intensified since 2015. Although foreign capital continues to flow in, the rate of outflow greatly exceeds the volume of inflow, negatively impacting the country’s investment attractiveness.
This is reported by Business • Media
Deterioration of International Investment Position
An important indicator of the state of the economy is the net international investment position (NIIP) – the difference between the assets that Ukraine invests in the global economy and the liabilities, meaning the funds that the global economy invests in Ukraine. A negative NIIP indicates that the inflow of international capital exceeds its outflow, which is traditionally considered a positive sign.
However, over the last decade, this indicator has significantly declined. In 2014, Ukraine’s NIIP was -38 billion USD (43% of GDP), but by 2022, amid the onset of full-scale war, it reached a minimum level. In 2024, this indicator stood at only -12.5 billion USD, or 6.57% of GDP, indicating a substantial reduction in the positive investment balance.
Change in Export Structure: Agricultural Sector Takes Center Stage
Alongside the loss of investment appeal, Ukraine is experiencing significant structural changes in its exports. According to economist and financial analyst Oleksiy Kushch, during the war, the ratio between industrial and agricultural-raw material exports has shifted in favor of the latter. Back in 2005, 71% of exports were industrial products, while 29% were agricultural. However, by 2021, these figures had changed: 40% were industrial exports, and 60% were agricultural-raw materials.
“The national economy has undergone a kind of structural inversion. During the war, this ratio has deepened even further – now it is 25/75 in favor of the second group of goods,” the analyst points out.
Compared to pre-war years, Ukraine’s industrial exports have decreased by 56.5%, from 23 billion USD per year to 9.8 billion USD. Meanwhile, agricultural-raw material exports have increased by 220%, from 9 billion to 29 billion USD, highlighting the growing role of the agricultural sector in the country’s economy.