Assessment of the State of Ukraine’s Light Industry Market and Possible Paths to Its Recovery
DOI:
https://doi.org/10.47451/ecn2025-04-01Keywords:
socio-economic sector, import and export of the light industry, logistical barriers, strict tax policy, financial instability, state supportAbstract
Under prolonged economic and political instability, particularly due to the war, Ukraine’s light industry market has undergone significant changes and challenges. The study aims to analyse the current state of the light industry market and identify ways for its recovery. The study employs economic and statistical analysis methods, systematisation, induction and deduction, and logical generalisation. The study methodology includes a combination of financial and statistical methods (to determine production capacity utilisation compared to the pre-war period, the proportion of industrial enterprises operating at near-full and full capacity, a systematisation method (to group the identified problems of Ukraine’s light industry market) and a method of logical generalisation (to formulate recommendations for the sector’s recovery). The study established that Ukraine’s light industry market is experiencing a difficult period due to a combination of internal and external challenges: a decline in exports, a disrupted export-import balance (imports exceed exports by a factor of three), increased import levels, a shortage of skilled labour, and difficulties in obtaining state financial assistance. It was found that the main problems of the light industry market include export difficulties due to customs barriers, inequality within the domestic market, economic instability and limited access to credit, a rigid tax system, insufficient state support and localisation, issues in workforce training, a significant share of the shadow economy, and logistical and transportation problems. The study determined that to restore Ukraine’s light industry market, a comprehensive set of measures must be implemented: the introduction of a temporary zero VAT rate for imported equipment and the implementation of a mechanism for using tax funds to invest in modernisation and innovation; initiating negotiations with the EU to eliminate import duties on textile products, which would help increase the export of Ukrainian goods to European markets. In addition, it was found that it is significant to support the domestic market through government programmes that ensure access to credit and adapt the tax system to martial law conditions.
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