On the way to recovery: Flashback to soccer boom shows Ukrainian investment moving past war - Bloomberg

16:06 Sep. 23, 2016

Flashback to soccer boom shows Ukrainian investment moving past war - Bloomberg

Ukrainian 50 hryvnia currency banknotes (Simon Dawson/Bloomberg via Getty Images)

Investment growth hits four-year high as confidence returns

The last time Ukrainian investment growth was this strong, stadiums and roads were being built to help co-host the Euro 2012 soccer tournament and there was no sign war was around the corner.

Four years on, with investors starting to look past the festering conflict in the nation's east, spending on agriculture and real estate is once again gathering pace. Second-quarter capital investment surged almost 18 percent from a year earlier and 9 percent from the previous three months, data this week showed.

The improvement offers a boost to what's so far been a lackluster recovery from 1 1/2 years of revolution- and war-induced recession. Gross domestic product will edge up 1.1 percent in 2016, accelerating to 3 percent the following year, the central bank predicts.

"Investment started to increase earlier than we expected," said Olena Bilan, chief economist at investment bank Dragon Capital in the Ukrainian capital of Kyiv. "We expect it to expand further in the second half of the year as the economy was heavily underinvested over last two years and many companies need to upgrade equipment."

Read also EU Commissioner reveals major obstacle for foreign investors interested in Ukraine

The government is also revamping infrastructure to help revive the economy's fortunes. Parliament this week ratified a 400 million-euro (USD 450 million) European Investment Bank loan for the agriculture industry, while a separate plan aims to channel almost 60 billion hryvnia (USD 2.3 billion) into roads.

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