Small and Medium Business in Ukraine Names Top Five Obstacles to Economic Revival, War Is Not the Main Issue
According to the latest research conducted within the framework of the project “Transformational Recovery for People’s Safety in Ukraine,” representatives of small and medium-sized enterprises (SMEs) in Ukraine have identified five main factors that most significantly hinder their development and impact the country’s overall economic situation this year.
The study, supported by the Japanese government and implemented in partnership with UNDP, Advanter Group, and other organizations, reveals that the primary challenges facing entrepreneurs are unpredictability in government policy—particularly its lack of long-term vision—and a shortage of purchasing power among consumers.
Additionally, ongoing uncertainty about the country’s future, difficulties in sourcing qualified personnel, and limited access to capital are major hurdles for business growth.
Interactions with government authorities also present barriers, including the blocking of tax invoices, denial of staffing reservations, and abuse of regulatory authority by officials.
Administrative barriers, such as the requirement for prepayment of taxes, further complicate the business climate.
Recently, the level of business optimism has declined notably: the Ukrainian Business Index (UBI), which evaluates the economic activity, stands at only 36.1 points out of 100 as of mid-2025, reflecting a downward trend compared to 38.6 in March 2025 and 36.9 at the beginning of the year.
This indicates a pessimistic outlook among entrepreneurs regarding future economic prospects unless corrective measures are taken to improve the situation.