Yuliia Svyrydenko, First Deputy Prime Minister — Minister of Economy of Ukraine 

 

Two words that define Ukraine’s economy this year? Resilience and recovery. Despite attacks on energy infrastructure, the destruction of factories, and countless wartime challenges, Ukraine’s economy continues to grow. Over the past 11 months, GDP reached 4%.

The Economist has highlighted Ukraine’s success in winning the economic war against russia. Even the IMF, which has been traditionally cautious, revised its GDP growth forecast for Ukraine in 2024, increasing it from 3% to 4%. Whether Ukraine is truly economically outperforming russia, will become clear once the war ends. However, we can already analyze the factors driving our economy forward today.

For me, 2024 has been the year of Ukrainian manufacturers. In February, the President initiated the “Made in Ukraine” policy aimed at fostering economic growth by restructuring the economy. Currently, processing industry accounts for around 10% of GDP—half the OECD benchmark which is considered a normal target. Achieving this goal shapes the design and focus of key programs implemented by the Ministry of Economy, which contribute to positive economic dynamics.

In particular, we are focused on creating conditions where producing, investing in production, and exporting high-value-added goods are economically advantageous in Ukraine.

These efforts are already visible. Of the 4% overall GDP growth this year, the "Made in Ukraine" initiative alone contributed 0.64%—or more than UAH 88 billion—according to Ministry of Economy calculations. Manufacturing has become a leading sector in tax contributions. In the first three quarters of 2024, it accounted for 16.7% of total Consolidated Budget revenues, with tax payments from the sector increasing by 19.6% year-on-year in the first nine months.

Next year, we will continue focusing on strengthening Ukrainian producers and the manufacturing sector. In the meantime, let’s reflect on what has been achieved.

Generating Demand for Ukrainian Goods from the State, Businesses, and Citizens

The localization policy in public procurement is designed to drive demand for Ukrainian goods from the state and communities. We aim to increase the share of local goods in public consumption to the European level. To achieve this, we are refining mechanisms for identifying Ukrainian producers and preparing to expand localization requirements to new categories, including defense. With exceptions for GPA countries.

To boost demand from businesses, we reinstated the program providing 25% compensation to farmers for purchasing Ukrainian agricultural machinery. At the end of this year, we launched a similar initiative: 15% compensation for buying Ukrainian energy equipment, wheeled vehicles, elevators, demining machinery, and other equipment. These programs make buying new Ukrainian equipment more profitable than importing used foreign equipment. Nearly 150 manufacturers have already used these programs to scale up production.

We also continued the “School Bus” program in 2024. Over the last two years, it helped communities to purchase 1,000 buses, ensuring that children could travel to school safely and comfortably. Ukrainian bus manufacturers and their suppliers benefited from these consistent orders, providing jobs to many.

The eOselya mortgage program has been another important factor in demand, particularly for construction materials, the production of which grew by 37.1% in the first half of 2024. Our goal is to shift to the primary housing market to amplify the economic impact. This year, the share of mortgages issued for the primary market doubled. The program also contributes to de-shadowing the economy—developers paid 2.2 times more taxes in the first half of 2024 compared to the same period in 2023 (UAH 1.6 billion).

Demand for Ukrainian goods has also been further stimulated by the “National Cashback” program. Research by the Retail Association of Ukraine shows that in its first months, the program increased sales of certain Ukrainian food products by 9.5% (in quantity) as consumers shifted from imported to domestic goods.

Investments Continue in New Factories Despite the War

Austrian company Kronospan launched a €200 million OSB production line in Rivne region, while British Unilever and Finnish Peikko are building plants in Bila Tserkva. Ukrainian investor Ma’Ryzhany Hemp Company is preparing to launch an industrial hemp processing plant in Zhytomyr region.

All these enterprises are situated within industrial parks, where the development policy is already yielding tangible results. Currently, 25 industrial enterprises, spanning sectors like agro-processing, woodworking, and mechanical engineering, are either completed or under construction in these parks.

This year, we allocated nearly UAH 1 billion in state support to 15 industrial parks for developing their infrastructure. Each hryvnia of public investment is anticipated to leverage 5–6 hryvnias of private investment.

The 5-7-9% loan program, which was refocused on investment purposes this year, partially solves the issue of access to credit resources. As a result, the share of investment loans doubled, reaching 46%. Positive dynamics are evident even in frontline regions, where the volume of investment loans increased from UAH 3 billion to UAH 25 billion over the year.

We have also made it possible to purchase energy equipment under the 5-7-9 program to support manufacturers in times of energy challenges.

A grant program offering up to UAH 8 million for developing manufacturing enterprises enabled over 1,000 small and medium-sized businesses to upgrade their production equipment.

The program for supporting projects with significant investment has also shown results. Businesses investing at least €12 million can now qualify for compensation of up to 30%. The first agreement under this program involves a €76 million investment by Astarta in a soybean processing plant.

We are also expanding war-risk insurance tools. To existing instruments provided by MIGA, DFC, and foreign export credit agencies, we added EBRD insurance this year, covering cargo, auto-, and rail transport, along with instruments from Ukraine’s Export Credit Agency.

Exports Set to Exceed $40 Billion in 2024

For the first time since the full-scale invasion, Ukraine’s exports are growing. By year-end, we expect an 11% increase in merchandise exports compared to last year.

This growth was supported by the extension of autonomous trade measures with the EU, continued tariff exemptions from the United States for Ukrainian steel, and updated free trade agreements with the UK and Canada.

Ukraine’s Export Credit Agency also played a role, supporting UAH 7.22 billion in non-raw-material exports in the first 11 months of the year—nearly UAH 2 billion more than the same period in 2023.

Programs supporting the development of manufacturing, investments, and non-raw-material exports, consolidated under the “Made in Ukraine” initiative, demonstrated their effectiveness in 2024. These efforts will continue to grow and expand in 2025.

For me, the “Year” of Ukrainian manufacturers has no deadline or final date. Every year should be a year when we value and support “Made in Ukraine”, because every Ukrainian producer is laying the foundation for our recovery, resilience, and economic self-sufficiency.