Ukraine

Ukraine’s public capital stock has been on a declining path over the last 20 years. Having started the period at a relatively high level (99 percent of GDP in 1996), it now ranks amongst the lowest of its comparator countries (56 percent in 2013). Evidence as to the reasons for the deterioration point to significant and persistent weaknesses in the institutional framework surrounding public investment management, inefficient allocation of resources to productive public investment and high levels of perceived corruption. Ukraine currently has an efficiency gap of around 32 percent, which ranks it below average amongst emerging market countries and other comparators. Persistent under-investment, the currently high stock of debt, and ongoing institutional weaknesses, coupled with effects of the conflict in the East could see this gap continuing to grow, absent concerted efforts to reverse recent trends.