Igor Mazepa, Concorde Capital CEO, discussed forecasts for Ukraine’s GDP growth in 2020
There is no essential difference in Ukrainian economic growth projections of 3% or 3.7% for 2020 - says Igor Mazepa. Both indicators show that the economy will continue to recover at a moderate pace after the collapse of 2014-2015. And this pace won’t significantly differ from what has occurred in the last three years. The economic breakthrough that was promised by the new government, if it ever happens, certainly won’t occur next year.
GDP growth is defined by the growth of its components – says Igor Mazepa. A forecast is supposed to demonstrate convincingly what factors will drive accelerated economic growth. In the conditions of the Ukrainian economy, acceleration can occur primarily owing to significant strengthening of investment inflows. This inflow can’t be created with domestic resources, which is why it’s necessary to strengthen foreign direct investment. Strengthening FDI is possible only in a situation of an obvious improvement of the investment climate in the country for foreign investors says Igor Mazepa.
Obviously, state officials who developed their forecasts don’t see factors at the current moment that would enable a significant improvement in the next year. Those legal and regulatory initiatives that exist at the current moment don’t offer a basis for believing that the environment in the country will improve in the nearest future to the extent that the advantages of investing in Ukraine in particular become obvious – states Igor Mazepa.
It’s possible that for some investors, select changes will be enough to make an appropriate decision. But select changes won’t be able to ensure an inflow of investment projects. Strengthening economic growth to the targeted 5-7% per year should involve an avalanche of investment projects considering it’s impossible to ensure such expansion with the base of existing production assets – summarizes Igor Mazepa.