The grade of the rating of investment attractiveness of Kharkiv city is due to its significance as one of the major cities in Ukraine and as a regional business, cultural and educational centre. Favourable natural and climatic conditions, as well as the industrial potential, which provide additional opportunities for investors, are constrained by infrastructural problems, in particular, by obsolete engineering and transport networks, facilities of housing and municipal economy, etc. At present, modernization and reconstruction of such facilities are being carried out, including with the participation of international financial institutions.
Activities on increasing the level of managerial culture in the city and with regard to improving the investment climate, high consolidation of the government branches along with the coordination of actions of the local authorities’ officials in solving the key issues of the city life, create potential for growth of indicators of the economic development in a number of sectors of the economy.
The city has some additional opportunities in the financial market due to a higher level of development of financial institutions than in other cities of Ukraine, and moderate debt burden on the local budget. The city authorities take active steps for improving the business climate and conditions for the economic development, free inflow of investments, which, inter alia, occurs through improving the policy documents. In 2016, the City Council approved the City Development Strategy, which defines the main directions and stages of the city development until 2020.
Kharkiv city is inherent in high indicators of social and economic development, some of which exceed the average indicators per capita in Ukraine (industrial products sold, retail trade turnover, housing commissioned and budget provision).
Activity of foreign investors in the city is sufficient and in 2016 was accompanied by the growth of the volume of FDIs. The indicator of ratio of FDIs per capita is higher than the average one for Ukraine. Along with this, the volume of assimilated capital investments has been increasing for several years in a row, in particular, by 1.6 times in 2016.
The city is inherent in good provision with establishments of health care, education and culture, financial institutions, all the key transport infrastructure is available. Indicators of personal income are at a lower level than the average personal income in the country. A decrease in the available population is observed, which occurs due to the natural and migration decrease.
A positive impact on the rating of investment attractiveness may have, as follows: improved regulatory framework and successful implementation of the basic programs of the city development, exceeding of all indicators of the social and economic development per capita over the nationwide level, improved conditions of the infrastructure. A negative impact on the rating may have, as follows: detection of complaints from investors on activities of the local authorities, decline in the city development indicators, environmental deterioration, reduction of investment volumes, further obsolescence of the infrastructure.
In order to perform the analytical research the materials obtained from Kharkiv city have been used, including: indicators of social and economic development, materials of statistical bulletins; annual Treasury statements, program materials, other necessary internal information, as well as the information from the public sources, which the Rating agency considers reliable.