Accelerating recovery, stimulating development of the manufacturing sector, increasing non-commodity exports, attracting increased investment into the real sectors of the economy and, generally speaking, creating new investment opportunities, facilitating the return of Ukrainians, in particular, through the eOseia programme – all these are contained in the economic growth strategy for 2024.
“Such growth is necessary for our economic self-sufficiency, so that we can cover the majority of our war-time expenses and be less dependent on international financial assistance, which continues to be vital for us,” Yuliia Svyrydenko, First Deputy Prime Minister of Ukraine and Minister of Economy of Ukraine wtote in her op-ed “Why Ukraine’s wartime economy is a surprising success” for the TIME magazine.
In collaboration with U.S. partners led by Penny Pritzker, the U.S. Special Representative for Ukraine’s Economic Recovery, the Ministry of Economy is working at a number of certain steps the enaction of which will contribute to the further growth of Ukrainian economy over the next 12-18 months.
“After Ukraine’s GDP shrank by a staggering 29% in 2022, no one believed our beleaguered war-time economy would make a significant recovery. In April 2023, the World Bank predicted a modest GDP growth rate of 0.5% for the year. But we’ve seen solid growth for the last several months, and the results are in: GDP grew nearly 5% in 2023. Despite so many unfavorable forecasts, Ukraine’s tenacity paid off, thanks in large part to the courage of entrepreneurs and the support of our international partners. For 2024 the GDP growth forecast is 4.6%, but in case we enact specific steps correctly, these measures could make us more independent and we can do even better in 2024,” Yuliia Svyrydenko noted.
According to her, the highest priority remains the ability to sell goods around the world unhindered.
“Launching the Alternative Black Sea Corridor of safe shipping lanes resulted in success, providing stable growth. We expect that growth to continue. We’re also increasing the capacity of E.U.-Ukraine Solidarity Lanes, primarily in Moldova and Romania. Meanwhile, we’re improving rail capacity for the transport of goods to Danube ports. The development of logistics and transport infrastructure will continue to be a core element of our cooperation with the U.S. and E.U.,” Yuliia Svyrydenko wrote.
“In 2021, our average monthly export revenue amounted to $5.6 billion. When the Black Sea Grain Initiative expired in July 2023, that decreased to $2.5 billion. Launching our own Alternative Black Sea Corridor of safe shipping lanes resulted in success, providing stable growth: sea freight traffic increased by 70% in November 2023 compared to October 2023. And it grew up to 30.7% in December 2023 compared to November 2023. We expect that growth to continue,” said the Minister of Economy.
Another high priority is the development of the Ukrainian defense industry. It’s currently contributing 3.6% to Ukraine’s GDP. But its potential is much greater. The Government is working to localise arms production in the country.
“We live in a situation where ensuring a technological advantage over the enemy becomes the key driver of industrial production and innovation, and it’s imperative that we localize armament production as much as possible-both for economic growth and national security. To this end, one of our goals for 2024 is to launch five joint ventures in Ukraine, together with Western arms manufacturers, which will involve the transfer of advanced technologies in partnership with Day & Zimmermann, Northrop Grumman, Lockheed Martin and Raytheon,” emphasized Yuliia Svyrydenko.
The next objective is the restoration of the energy sector.
“This year we will continue to develop electricity generation throughout the year, primarily via nuclear power, green energy, and interconnectors with the E.U. power grid. Notably, Ukraine is now fully integrated into the E.U.’s common electricity market,” she said.
Another priority, according to Yuliia Svyrydenko, is to attract foreign investment.
One more important step is to return the frozen russian state assets, estimated at around EUR 300 ($325) billion. Interest from these funds continues to accrue, generating EUR 4-6 ($4.3-6.5) billion of profit annually in the E.U. alone. The Ukraine’s Government hopes to receive all frozen assets as compensation for the damage caused. Moreover, Ukraine counts that in February at the next summit, the European Commission will decide to allocate EUR 50 billion under the Ukraine Facility programme.
All these steps, the minister notes, will contribute to the resilience of the Ukrainian economy.
“Behind much of this are regular people. Self-sufficiency means having the resources to support our soldiers on the front lines and civilians in the rear; to be able to support businesses, from small enterprises to large factories; to integrate veterans in civilian life and provide dignified conditions to those who defend our land; to rebuild or destroyed infrastructure; and to create the conditions for millions of Ukrainians abroad to return home,” summed up Yuliia Svyrydenko. (Government portal/Business World Magazine)
