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Kyiv, Ukraine – After almost a decade of economic hardship and recession, spring has finally arrived for Ukraine’s economy. The country has achieved this by focusing on structural reforms, building trust with international creditors, and implementing a series of economic policies that have opened up new fiscal opportunities for the nation.
Since breaking from its Russian ties in 2014, the country has seen a steady increase in GDP, making it one of the region’s strongest growth economies this year. The Ukrainian government is attributing this growth to a number of measures taken to improve the economic climate and open up greater opportunities for businesses and foreign investors. Among these initiatives has been the adoption of a more business-friendly tax code, an improved currency regime and a bankruptcy law that has enabled businesses to restructure operations and recapitalize themselves.
The reforms have been well received by international institutions. The IMF has noted the country’s commitment to fiscal policies and its strong track record of adherence to stringent fiscal targets. As a result, Ukraine has secured a major loan package to help it bridge its financing gap. This will be supported by a three-year Extended Fund Facility with the IMF worth $5 billion in connection with which Ukraine will implement a set of reforms, including changes to its banking system, healthcare system, and education system.
The impact of the policy has been far-reaching. The Ukrainian economy has also seen improvement in its agricultural sector, which accounts for a large portion of the population’s income. The government of Kyiv has prioritized measures for the sector and launched a five-year grant program for its modernization. Improved infrastructure and the introduction of digital technologies have helped to facilitate the growth of agribusinesses and marketplaces specializing in farm produce.
Though growth is still well below pre-2014 levels, Ukraine’s economic transformation has been a great success. With the steady improvement in confidence from foreign investors and the support of international lenders, Ukraine’s economy is poised to thrive in years to come. As spring blooms, so too does Ukraine’s economic prospects.