Ukraine is threatened with the loss of a quarter of industry without state support: GMK Center research
Ukraine faced the threat of a significant reduction in the industrial sector, which could reach 20-25% due to the consequences of the war. Such conclusions done in the GMK Center study.
According to the results of 2022, the volume of industrial production in Ukraine has significantly decreased. In metallurgy, the decline was 66.5% compared to the previous year, in mechanical engineering – 43.1%, in construction – 35.2%. The full-scale aggression of the Russian Federation led to a drop in the index of industrial production from 101.7% at the end of 2021 to 69.4% in June 2024 (baseline – 2016). For 2022, production declined by 36.7%, and the index of construction products almost halved from 199.7% to 94.2% over the same period.
Investment activity in the country also suffered a significant decline. In 2022, capital investment fell by 48.7% compared to 2021, and in 2023 this indicator decreased even more – by 56.2% compared to the pre-war level. The main reason was a full-scale invasion that undermined economic stability and limited the development of key industries.
“Without a strong industrial base, Ukraine will not be able to develop and will not recover after the end of the war even to the pre-war level of socio-economic development and production. Ukraine needs systematic support of the basic sectors of the economy (engineering, MMC, chemical industry), which fill the state and local budgets, bring in the country’s foreign exchange revenue. This requires the right government policy to stimulate the development of industry and significant investments.”, – emphasized in GMK Center.
Despite the difficulties, in 2024 Ukraine began to restore its position on the world market of iron ore raw materials. In eight months of the current year, 23.3 million tons of raw materials were sent for export – almost as much as in the whole of 2022, and significantly more than in 2023. Exports brought the country more than $2 billion in foreign exchange earnings, which indicates the growth of export potential even in difficult conditions.
