The full-scale war has caused great damage to the Ukrainian economy.
As a result, Ukraine's GDP fell by 29% in 2022. But the Ukrainian economy has adapted and is starting to recover. According to forecasts by the Ministry of Economy, GDP growth will be around 4% in 2023 and the economy is expected to grow by 4.6% in 2024.
The private sector is the most important driver of reconstruction. We are already in the process of creating growth points for the post-war economy. The government is providing comprehensive support to the economy, creating the most favourable investment environment and forming a global coalition of investors together with partners.
The priority areas on which the Ukrainian economy of the future will be based are clearly defined. This is a defence industry based on new design developments, manufacturability, technology transfer and. Military Tech. This is an export-oriented agricultural and industrial complex with a focus on processing. This is the engineering industry for the manufacture of high value-added products. This is the construction industry, which will become the locomotive for the reconstruction of housing and infrastructure destroyed by russia. It is the IT industry, which continues to grow even in the face of war. This is the energy sector.
The government is planning to expand support programmes for small and medium-sized enterprises. Preferential loans, grant programmes, the development of industrial parks, war risk insurance for the reconstruction of investments, deregulation, the development of new logistics, trade liberalisation – all this is on the agenda for the recovery of the Ukrainian economy and the support of domestic entrepreneurs.
Ukraine is building a new economy: export-oriented and integrated into European and global production chains.
Securing macro-financial and macro-economic stability will remain a priority. This includes raising more than 37 billion dollars in external funding to cover the budget deficit.
1. Support for small and medium-sized enterprises
Small and medium-sized enterprises should become one of the main growth points of the Ukrainian economy. To achieve this, we are deploying funds to support existing enterprises and create new ones. Entrepreneurs receive non-repayable grants through the eRobota programme. We provide companies with preferential loans via the "5-7-9" programme and the portfolio guarantee programme. These programmes are being extended and expanded and their work is being improved with the aim of creating as many new enterprises as possible.
2. Support for the Ukrainian manufacturer
The state will use a number of instruments for the development of domestic mechanical engineering. In 2024, the budget provides funds for compensation for the purchase of Ukrainian equipment. We are increasing the state order for the purchase of military equipment, new railway carriages, buses and utilities. We promote the localisation and development of domestic production of machinery and equipment for demining. We are creating a register of Ukrainian manufacturers to make programmes to promote local production more effective. We activate construction through the eRecovery and eOselia programmes.
3. Development of industrial parks
We develop industrial parks, i.e. industrial sites with ready-made technical connections and tax benefits. We currently have 70 registered. We plan to strengthen the protection of these areas. An investor can use all the possibilities of industrial parks to realise his business project, develop production and create new jobs.
4. Investment projects and war risk insurance.
We create the most favourable investment environment for domestic and foreign investors. We have developed investment proposals worth more than 400 billion dollars. Priority is given to energy, defence industry, agriculture, natural resources and digital technologies. The government office for attracting and supporting investments UkraineInvest is functioning. It provides customised support for investment projects. We offer investors ready-made solutions: tax benefits, compensation for the costs of connection to the engineering and transport network, public-private partnership for the creation of new successful concession projects. Diia.City has started its work, one of the best legal and tax regimes for IT companies. We are expanding the possibilities for war risk insurance with the help of MIGA, DFC, EBRD and national export credit agencies of partner countries.
Deregulation is a large-scale systemic reform. As part of this reform, some of the regulatory instruments are being abolished, simplified or digitalised. As a result, entrepreneurs can concentrate on realising their business projects and not on relations with the state. Bureaucracy and corruption risks will be minimised and broad opportunities for the implementation of entrepreneurial initiatives will be created. The most important goals include reducing the number of different authorisations and reviewing the functionality of the regulatory authorities in 126 areas.
We are developing logistics towards the west to enable the fastest possible transport of people, goods and services. Together with our western neighbours, we are building new border checkpoints and modernising existing ones. We are establishing joint customs and border controls with our European neighbours. Cargo handling at the Danube ports has reached a record level and continues to increase thanks to the dredging works and the public-private partnership. We are integrating the Ukrainian railway network into the European network. We intend to reconstruct railway sections in strategically important directions. We will continue to develop the infrastructure for the transfer of goods from Ukrainian to European railway tracks. We plan to update the fleet of passenger and freight wagons for domestic transport. We will continue to develop the work of the new Ukrainian corridor, through which Ukrainian goods are exported from the ports of Greater Odesa.
7. Macroeconomic sustainability
In order to finance defence and security as well as other priority budget expenditures, Ukraine will need to raise more than USD 37 billion in external funding in 2024. This requires systematic and coordinated work by the government, other executive bodies and partners. Ukraine will strengthen and expand the work of the Multi-Agency Donors Coordination Platform for Ukraine. And also actively cooperate with the IMF, the EU, the US, Japan, the UK, Canada, Norway, other countries and international financial institutions to obtain the necessary budget financing.