Business Opinion, 10/09/2018

Three Reasons to Invest in Ukraine Now

Taras Danko

Professor of International Business at National Technical University “Kharkiv Polytechnic Institute,” twitter: @tarasdanko

While economists and financial analysts are always absorbed with data and numbers, they frequently miss the tipping point when economies are starting skyrocketing. However, if you are an international investor, you are looking for big opportunities when things change dramatically. And here is the good news for you! It is the right time to add Ukraine to your watchlist and start accumulating funds to invest here if you want them to double or even triple fast.

Recent years were somewhat challenging to Ukraine. Russian war, constant corruption accusations and domestic political turmoil were the curses beating its economy almost to death. Nevertheless, Ukraine survived it and even managed to perform satisfactorily.  Foreign direct investments continue to flow in even during the worst times, economic growth revives, inflation reduced to one-digit, the hryvnia exchange rate remains relatively the same, while exports to EU steadily increase. Moreover, Ukraine has improved its Doing Business rating to 76 in 2017 from 112 in 2013, while business confidence returns to its prewar level.

So the opportunity is looming, and you should not hesitate to seize it!

There are three reasons why you have to act now.


Reasonably priced highly-skilled labor and free access to EU markets


Ukraine is a place where you should locate manufacturing facilities if you are interested in high yield exports to the EU which is the second largest economy in the world. Recent Association Agreement grants free EU market access to goods and services produced in Ukraine. Simultaneously, Ukraine ranks seventh in the world by the number of engineering graduates. This implies a vast supply of highly-skilled labor for knowledge-intensive export-oriented jobs. So, outsourcing EU-bound high-tech production to Ukraine can become your gold mine.



Property prices will upsurge soon


The average monthly wages in Ukraine increased from $210 in January 2017 to $325 in August 2018 while housing prices stayed fairly unchanged. Further growth of wages caused by favorable economic developments and proximity to the EU will eventually trigger the housing prices upwards soon. The similar scenario is relevant for other real estate assets in Ukraine as the consumer and business confidence growth will gain further momentum. Ukrainian stock market PFTS index increased two times during the last ten months. All this suggests the steeply soaring bull market on the radar.


Domestic consumption expands rapidly


Finally, you can also build on the vast Ukrainian market. Look at those figures! In the first half of 2018, the sales of new passenger cars increased by 7 percent in Ukraine. It seems modest until you add almost 50 percent growth of used cars imports. The number of Ukrainian tourists heading abroad rose 10 percent in 2017. The similar trend remains in 2018. There were 17 percent more visitors at McDonald’s Ukraine outlets in 2017 compared to 2016. Different sectors in Ukraine, all demonstrate positive trends.


No matter what type of investor you are – greenfield,  business angel, real estate or portfolio – there are promising opportunities for you in Ukraine to explore.

Photo: pixabay, tradingeconomics