42015590 - Horizons Q2 2022_v06

ISSUE 2 | 2022



Projections, given the ongoing conflict, are subject to great uncertainty and large downside risks. These projections are predicated on massive declines in imports and exports, given the trade disruptions and the blockade of the Black Sea ports, a collapse in public and private investments and a big drop in household spending, reflecting the displacement of large numbers of people, loss of incomes and livelihoods. Over the medium-term, the damage to Ukraine’s production and export capacity and loss of human capital are expected to have lasting economic and social repercussions. A major reconstruction effort is going to be necessary, complemented by institutional, structural and financial sector reforms to support private sector-led growth, but this will all be contingent on achieving substantial external financing on concessional terms.

In 2013, the most active sectors in the country’s M&A were agriculture and food, banking, FMCG, energy and TMT. In 2021, TMT became Ukraine’s biggest growth industry and exports of outsourcing and programming services reached USD 6.8bn (five times higher than the USD 1.3bn recorded in 2013). According to the Global Sourcing Association, Ukraine has become the #1 outsourcing destination globally and is home to more than 200,000 highly‑skilled IT professionals. The restart of the big and medium-sized privatisation of state-owned enterprises became an additional driver of the country’s M&A market. In 2021 there were 36 M&A deals worth USD 813m in TMT, 19 deals worth USD 234m in the agro sector, 10 deals worth USD 124m in Energy, Mining & Utilities, and six deals worth USD 650m in Real Estate and Construction. The tension arising from the deployment of Russian army to the Ukraine-Russia border has effectively frozen the market from December 2021.




From February 2022 onwards, the war has completely disrupted maritime trade (amounting to half of the country’s total trade and 90% of its grain trade); it has heavily damaged the country’s critical infrastructure and has triggered a massive displacement of people. In a March 2022 report, theWorld Bank forecasted that Ukraine’s GDP would drop by 45% this year and that there would be a weak recovery thereafter.


Sources: BDO research, Statistics of Ukraine, UkraineInvest, World Bank, FAO, IMF, Mergermarket.

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