The Ukrainian economy has been experiencing a significant decline in investment appeal since 2015. Although foreign capital still flows into the country, the rate of its outflow greatly exceeds the inflow, negatively impacting the country’s economic development.
This is reported by Finway
Dynamics of the International Investment Position
The assessment of the net international investment position (NIIP) determines the difference between the funds that Ukraine invests in the global economy and the capital invested in the country from abroad. For Ukraine, a negative NIIP is considered a favorable indicator, as it reflects the predominance of international capital inflow over its outflow. Ten years ago, the NIIP was -38 billion USD, which accounted for 43% of the country’s GDP. However, over time this figure has decreased, and in 2022, influenced by the onset of the full-scale war, it reached a minimum value. In 2024, Ukraine’s NIIP stands at only -12.5 billion USD, or 6.57% of GDP.
Changes in Export Structure: Agricultural Sector Takes Center Stage
Over the years of war, the ratio between Ukraine’s industrial and agricultural-raw material exports has significantly shifted in favor of the latter. In 2005, industrial products accounted for 71% of exports, while agricultural-raw materials made up 29%. By 2021, the ratio had shifted to 40% and 60%, respectively. This trend has only intensified during the wartime period.
“The national economy has undergone a kind of structural inversion. During the war, this ratio has deepened even further – it is now 25/75 in favor of the second group of goods,” the analyst points out.
In absolute terms, the volume of Ukraine’s industrial exports has decreased by 56.5% – from 23 billion USD per year to 9.8 billion USD. At the same time, exports of agricultural-raw material sector products have increased by 220%: from 9 billion USD to 29 billion USD per year.