Inward investment up 20%

Ukrainian market analysts report that capital flows into Ukraine have intensified following this year’s Presidential elections due to a sharp increase in external loans secured and a steady growth in export earnings.

According to the National Bank of Ukraine, net loan funding in March alone reached $437m with the monthly export revenues for March forecast to rise by 14.5% from the previous month to reach $5.1bn. Foreign direct investments in the first part of 2010 grew by 20% to $508m, in comparison with the second half of 2009.

In March 2010 net borrowings amounted to $213m, in addition to $138m invested in government bonds by foreign investors. Market analysts suggest that 80% of external borrowings came from offshore companies owned by Ukrainian entrepreneurs who channelled the money out of the country during the economic crisis.

The Ukrainian government budget for 2010 includes external borrowings of UAH 34.1bn ($4.2bn). In addition, the government now expects to receive an IMF loan for up to $20bn in the next two and a half years.