This report focuses on the Ukraine war and its impact on the following: (i) conflict matters; (ii) firm resilience and adaptation at limit; and (iii) direct government support remains low.
Authors
Avdeenko,Alexandra, Castro,Lucio, Criscuolo,Alberto, Gillaizeau,Marc Vincent, Goriunov,Dmytro, Iacovone,Leonardo, Kaiser,Maximilian Albrecht Heinrich, Maduko,Franklin Okechukwu
- Disclosure Date
- 2024/06/26
- Disclosure Status
- Disclosed
- Doc Name
- Ukraine - Firms through the War 2.0
- Product Line
- Advisory Services & Analytics
- Published in
- United States of America
- Rel Proj ID
- UA-Export Competitiveness In Ukraine -- P177312
- Sector
- Trade
- TF No/Name
- TF0B7096-Supporting Trade Policy Reforms in Ukraine,TF0B7189-Role of Digital Adoption and Green Solutions in Ukraineâs Export C,TF0C3778-Ukraine Economic Recovery Plan Enabling Private Sector-Led Growth
- Theme
- Global value chains,Job Creation,Trade Facilitation,Human Development and Gender,Data Development and Capacity Building,Economic Policy,Trade Policy,Environment and Natural Resource Management,Disease Control,Enterprise Development,Private Sector Development,Pandemic Response,Public Sector Management,Climate change,Jobs,Trade,Adaptation,Data production, accessibility and use
- Unit Owning
- EFI-ECA-FCI-Finance-2 (EECF2)
- Version Type
- Final
- Volume No
- 1
Table of Contents
- UKR_Firms_through_the_War_2.0_Summary_PPT_FINAL (003).pdf 1
- Slide Number 1 1
- Key messages 2
- Multiple and Novel data sources. Higher coverage, frequency, & depth 3
- Firm exits and entries between 2021,2022, and 2023. Large firms are less likely to exit or to enter 4
- Slide Number 5 5
- Sales partially recovered but remain below pre-war levels 6
- Number of e-commerce sales transactions halved a year after the war 7
- Small companies experienced continued decline in sales, while large firms report partial recovery 8
- Large firms export to the EU. Exports to the EU is correlated with higher sales. 9
- Little structural change in commerce and manufacturing, but a 27.3% drop in construction from 2021 to 2022 10
- Major structural changes in sectors and activities directly linked to the war economy: War-related subsectors see a steady yearly increase by 0.1 pp from 0.2% in 2021. (or 30% from 2021 to 2022). Electricity sector drops by 11.6% from 2022 to 2023. 11
- Changes in economic geography: Move towards West Ukraine (from 17.1% in 2021 to 20.1% in 2023) 12
- Slide Number 13 13
- Immediate shock after the invasion. Drop in sales throughout the country, but Eastern oblasts hit more adversely. 14
- While most regions recover, Luhansk, Kherson, and Donetsk — the war-affected and occupied areas— continue to face declining sales from 2022 to 2023 15
- Price increases are higher in more conflict affected regions, the highest in Donetsk 16
- Prices increases in Electronics while in Apparel they drop 17
- Less choice for consumers? Products assortments in Electronics reduce, in Luggage they increase 18
- Changes in sales for different products The highest drop is observed in the product categories furniture (-92.5%) and home & gardening (-86.2%) 19
- Slide Number 20 20
- Fixed capital assets face ongoing destruction 21
- Fixed assets continue to drop, no sign of recovery, particularly in Kyiv City/ the Financial (non-banking) and Insurance Activities 22
- Firms face challenges in hiring 23
- Slide Number 24 24
- Financial fragility declined over time, but is still very high with a 34% probability to fall into arrears for small businesses that survived 25
- Slide Number 26 26
- Direct governmental support is associated with more sales, employment, and investment 27
- Governmental support remains low. Only 8% have access, with only large firms increasing support over time 28
- The 5-7-9 Program was the most frequently reported as support program firms participated in reported in BPS wave 2; 55% of firms 29
- Governmental support/ policies in support of the private sector (including business environment reforms) is needed. Especially for simplification of regulations, market access, and VAT blockages 30
- Slide Number 31 31
- Slide Number 32 32
- Slide Number 33 -1
- Ukraine_ 2nd Wave Monitoring_Two_Pager_FINAL.pdf 33
