Ukraine – green shoots and uncertainty

Ukraine has broadly seen an improvement in its economic outlook since the 2019 election of comedian and actor Volodymyr Zelenskiy to the presidency. After years of turmoil, culminating in the 2014 defenestration of pro-Russian president Viktor Yanukovych and the Russian invasion of the Crimea, Ukraine has deepened its ties with the EU, adopting reforms that closely map those of European legislation. This has encouraged foreign investors, while legislative reform continues apace, with a new capital markets law coming into effect in 2020 that implemented the provisions of key EU law, including MiFID II, MiFIR, and CRD IV. There are also ‘grandiose governmental plans for the privatisation of state property and large-scale infrastructure projects’, in the words of Armen Khachaturyan, senior partner at major domestic firm Asters, while the legalisation of the gambling industry in July 2021 is also driving client activity.

Ukraine frequently competes with Moldova as the poorest country in Europe, despite its huge agricultural exports, though this is partly due to a lack of transparency in the economy, in which much economic activity goes unreported. Since 2014, the National Bank of Ukraine (NBU) has closed a huge percentage of the country’s commercial banks, partly to clamp down on corruption and money laundering, but state control of banks is part of the reason why inflation and interest rates remain high.