Ukraine risks losing $260–300 billion in GDP, exports and tax revenues by 2035 if the state does not change approaches to industrial development. Such conclusions were reached by experts from the Ukrainian Institute of the Future (UIF), who presented the study “Inertial Scenario for the Development of Ukrainian Industry by 2035”.

According to Anatoly Amelin, co-founder and executive director of UIM, the idea for the study arose after analyzing the consequences of shutting down the Ingulets Mining and Processing Plant. “I was interested in what would happen if other businesses closed too. We calculated: the closure of just one large plant cost the state billions of hryvnia in budget losses. That’s when the idea arose to study where Ukrainian industry was heading and what would happen if current trends continued,” he noted..

According to estimates by the Ukrainian Institute of the Future, if current policies are maintained, by 2035 the total economic losses will amount to $260–300 billion in GDP, exports and tax revenues. This equates to approximately $75–80 million in losses daily, or approximately $3 million per hour.. In addition, the country could lose more than 800 thousand jobs, which will further aggravate the demographic and economic crisis..

" This is a quiet progressive degradation that becomes less and less reversible every year. Ukraine today is choosing not between reforms and stability, but between difficult decisions and deindustrialization. And the price of inaction will be significantly higher than the price of necessary reforms,” the authors of the study concluded..

The study notes that the main threat is not a single problem, but the cumulative impact of several negative factors. Among them are high electricity prices, rising railway tariffs, the operation of the CBAM mechanism, staffing shortages, logistics constraints, lack of available financing and the lack of a modern industrial policy.. It is the combination of these factors that triggers the so-called “degradation loops” - when problems in one area automatically worsen the situation in other sectors of the economy.

Experts paid special attention to the situation in Ukrzaliznytsia: according to Amelin, the model in which unprofitable passenger transportation is financed by the cargo segment actually stopped working after a full-scale war. " This has practically deprived us of the opportunity to continue to subsidize passenger transportation at the expense of business. If you just continue to raise freight rates, the industry will simply collapse,” he said.

According to researchers, compensation for socially important passenger transportation should be carried out within the framework of government policy, and not by shifting costs to industrial enterprises. A further increase in freight tariffs will only worsen the crisis in the industry, which is already operating in conditions of expensive energy resources, loss of export markets and high logistics costs.

The authors of the study called the CBAM transboundary carbon adjustment mechanism another systemic challenge: without a transition regime for Ukraine, it will significantly worsen the competitiveness of Ukrainian metallurgy, the chemical industry and other export-oriented industries. “For many enterprises, it will be easier to close or transfer investments to other countries than to invest tens of billions of dollars in decarbonization in conditions of war and high risks,” Astakhov noted..

Experts call the cost of electricity an additional factor in the loss of competitiveness.. According to them, in certain periods the price of electricity for Ukrainian industry exceeds the European one several times, while EU countries actively support energy-intensive enterprises with the help of special compensation mechanisms.

The personnel crisis is considered no less a problem at UIM: the shortage of workers in industry already reaches about 37%, and the country continues to lose population due to war and emigration. The seven million Ukrainians who are now abroad create added value for other economies, while Ukraine loses human capital and potential economic growth.