European companies operating in Ukraine have identified four key risks that impact the business climate in the country. These challenges are relevant not only for European but also for American and Ukrainian enterprises.
This is reported by Business • Media
Energy Crisis and Workforce Shortage
Anna Derevyanko, Executive Director of the European Business Association, emphasized that the energy issue is coming to the forefront: instability in electricity supply and its cost significantly affect the operations of companies. The second major risk is the shortage of qualified personnel. This is due to the emigration of a significant portion of the population abroad, especially after the permission for young people aged 18-22 to leave, as well as mobilization processes. Additionally, the reduction of the consumer market due to migration complicates the situation for many businesses.
Growth of the Shadow Economy and Legislative Changes
Another serious problem has been the increase in the share of the shadow sector of the economy. According to Derevyanko, the volume of the economy “in the shadows” reaches 500 billion hryvnias. The fourth significant challenge for businesses remains the frequent changes in legislative rules, which create uncertainty and complicate long-term planning for companies.
“99% of EBA member companies operate at full capacity in Ukraine, over 70% expect revenue growth in hryvnias, and 55% in dollars. Furthermore, 55% of companies are focused on increasing business development and 20% plan to invest in investment projects.”
Andriy Gunder, President of the American Chamber of Commerce, added that despite constant shelling, 91% of member companies continue to operate in Ukraine and develop their businesses. At the same time, half of the enterprises (54%) have already suffered damage due to hostilities, yet the majority remain in the market and consider prospects for further development.