Economic Reconstruction of Ukraine

The chapter analyses characteristics of Ukraine’s economic reconstruction following the intensive phase of the war. We first cover the demographic situation, which is indeed very problematic given a long-run population decline and the significant shock of war-induced migration and displacement of persons. Then, we analyse patterns of the comparative (specialisation) advantages of Ukraine’s economy, identifying the potentials Ukraine will have in order to attract FDI and integrate into cross-border production linkages. Next, we cover the varying situation across Ukraine’s regions, their highly uneven potential for recovery, and evaluate their future possibilities for production and trade specialisation. We discuss Ukraine’s position in the context of its accession to the EU: this covers how Ukraine compares in terms of a multitude of indicators with other Central and Eastern European countries before they acceded to the EU, as well as with candidate countries in Southeast Europe. Finally, we discuss how Ukraine’s accession will impact existing member countries – with an emphasis on countries in Central and Eastern Europe – in macroeconomic and structural terms, and also with respect to implications regarding Ukraine’s participation in EU budgetary programs.