FOREIGN DIRECT INVESTMENT IN THE ECONOMY OF UKRAINE: CURRENT TRENDS AND EFFECTIVENESS OF ITS USE

Abstract

The article examines current trends in the attraction and use of foreign direct investment in the Ukrainian economy during 2020–2025. The study aims to identify changes in the dynamics and structure of foreign investment and to assess the effectiveness of the use of attracted capital in relation to the key indicators of the country’s economic development. The research employs statistical and comparative analysis, systematization, structural and dynamic analysis, and generalization. The volumes of foreign direct investment, equity instruments, reinvested earnings, and debt instruments are analyzed. The findings reveal considerable volatility in investment flows throughout the study period and substantial changes in the sources of their formation. It is established that the recovery of foreign investment after 2022 was largely driven by the reinvested earnings of enterprises with foreign participation, whereas their role decreased significantly in 2025. The accumulated stock of foreign capital was found to be more stable than annual investment flows. The sectoral structure of accumulated foreign direct investment is analyzed, revealing that foreign capital is predominantly concentrated in industry, wholesale and retail trade, and financial and insurance activities. The effectiveness of foreign direct investment is assessed by comparing its dynamics with changes in gross domestic product, capital investment, and exports of goods and services. The results indicate the absence of a stable proportional relationship between foreign capital inflows and changes in the main indicators of economic and investment activity. The findings demonstrate that an increase in the volume of attracted foreign capital does not in itself ensure a corresponding improvement in the key parameters of economic development. The study substantiates the need to strengthen the orientation of investment policy towards the productive use of foreign direct investment and its allocation to economic activities capable of expanding productive capacity, stimulating investment processes, and generating long-term economic effects.