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Ukraine's EU Accession May Boost GDP By 26%, Polish Study Says
Ukraine's EU Accession May Boost GDP By 26%, Polish Study Says

Forbes

time30-06-2025

  • Business
  • Forbes

Ukraine's EU Accession May Boost GDP By 26%, Polish Study Says

BRUSSELS, BELGIUM - President of the EU Council Antonio Luis Santos da Costa (L), President of ... More Ukraine Volodymyr Zelenskyy (C) and the President of the European Commission Ursula von der Leyen (R) talk prior to the start of an EU Summit on March 6, 2025 in Brussels, Belgium. (Photo by) Ukraine's accession to the European Union (EU) could boost its GDP by up to 26% and generate economic gains for Central European countries through expanded trade, according to a new report by the Polish Economic Institute (PIE). The report finds that the faster Ukraine aligns with EU standards and implements economic reforms, the greater the regional benefits. Analysts modeled three scenarios, all of which project a positive impact on Ukraine's GDP from joining the EU. In the most optimistic case, GDP could rise by 26% within two years of accession as a result of integration into the customs union, improved access to European supply chains, economic reforms, and the inflow of EU funds. Productivity could increase by up to 7.8%. Under less favorable conditions, depending on population trends and productivity growth, GDP gains could range from 1.7% to 6.8%. Ukraine's accession is also expected to lift GDP in neighboring Central European countries, including Poland, Lithuania, and Hungary, by between 0.13% and 0.17% in the best-case scenario. The report notes that increased Ukrainian production would cause only a slight decline in output elsewhere in the EU, and negligible effects in other parts of the world. Strengthening Eastern European Trade Ties Between 2021 and 2024, total exports from Poland, Hungary, the Czech Republic, Slovakia, Lithuania, Romania, and Bulgaria to Ukraine rose by approximately 75%. While much of this growth was driven by war-related goods, including dual-use products and materials for replacing damaged infrastructure, other sectors also expanded. During this period, Poland emerged as a key trade partner, becoming the top importer of Ukrainian goods and the second-largest global exporter to Ukraine, after China. Polish exports to Ukraine more than doubled between 2021 and 2024, surpassing those from Germany. Aleksandra Sojka, one of the report's authors, says Poland could strengthen its position as a regional leader by moving from trade exchange to active investment, particularly through foreign direct investment and joint ventures. However, due to high investment risk, Poland should establish state guarantees and financial instruments to shift this burden away from the private sector, she notes. In contrast to exports, imports from Ukraine into Central Europe have shown significant volatility in recent years. In 2022, Ukrainian exports surged to €15.8 billion from €10.8 billion the year before, as Russia's invasion disrupted Black Sea shipping routes and redirected trade through Central Europe. Agricultural products, including grain, vegetable oils, and seeds, were rerouted via neighboring countries, which became critical export corridors. Over the past decade, Ukraine has reoriented its trade away from the Commonwealth of Independent States—a bloc of post-Soviet countries led by Russia—towards the EU. Deepending EU Ties Ukraine's potential EU membership would mark a significant milestone in deepening bilateral economic ties, building on momentum that began with the 2014 Association Agreement between the EU and Ukraine. The agreement established a Deep and Comprehensive Free Trade Area (DCFTA), which came into full effect in September 2017. Following Russia's full-scale invasion in 2022, the EU introduced Autonomous Trade Measures (ATMs), suspending tariffs and quotas on Ukrainian goods. Risks of a Negative Scenario The report also explores the potential consequences if Ukraine fails to join the EU. In the event of military defeat or an unfavorable ceasefire leading to Russian domination, Ukraine could lose access to the Black Sea, its primary export route. Exclusion from EU structures, combined with declining productivity and intensified migration pressures following a military collapse, could result in a GDP drop of over 22%. In practice, the report warns, losses could be even more severe, as the model does not fully account for the long-term impact of regional instability on foreign investment.

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