Ukraine Shows the Fastest FDI Growth in CIS

KYIV, Ukraine, July 29, 2011 /PRNewswire/ --

Ukraine is the leader among the Commonwealth of Independent States in the foreign direct investment growth, according to the United Nations trade and development body annual report on global foreign direct investment. Foreign direct investment flow into Ukrainian economy increased by 35% up to USD 6,5 bln in 2010, making Ukraine one of the leading investment recipients in the CIS region.

Ukraine, Russia, and Kazakhstan are the three leaders in the CIS region as to the amounts of the Foreign Direct Investment inflow. Ukraine demonstrated an FDI increase in the amount of 35% which is the highest rate for the CIS countries in 2010.  Comparatively, the increase of the FDI flow to Russia in 2010 constituted only 13%, whereas Kazakhstan's index dropped by 27,5%.

Recently, the global rating agency Fitch Ratings raised Ukraine's long-term foreign credit rating from stable to positive. The significantly smaller budget deficit this year has been stated as one of the reasons for the revision of Ukraine's rating. Also, the economic recovery and spending restraint along with parliamentary approval of an unpopular pension reform contributed to Fitch's decision to mark Ukraine's economic advances.

Notably, according to the World Investment Report 2011, the Ukrainian FDI flow constitutes 23% of gross fixed capital formation. At the same time, the average rate for the CIS is 15,1% and for the world - 9,1%.

The UN report states that throughout 2010 the foreign investments continued to be affected by the recovery of industries and international trade. Despite reports that the global industrial production and world trade approached the levels of 2008, the FDI flow at the end of 2010 still remains below its pre-crisis average and far below its 2007 peak. Ukraine's progress, according to the experts, is believed to be triggered by the improvement of the macroeconomic situation in the country.

The UN World Investment Reports have been published by the UN since 1991. They focus on worldwide FDI trends, at the regional and country levels. The reports contain recommendations as well as put special emphasis on the development implications that influence the FDI trends.