Ukrzaliznytsia's tariffs could reduce GDP by UAH 100bn

An increase in tariffs for freight transportation by Ukrzaliznytsia could lead to a loss of up to UAH 100bn of GDP, the Federation of Employers of Ukraine warns. The business believes that the government's plan to raise tariffs by 37% will significantly hit exporters and industry, which is already operating at a third below pre-war levels.

Ukrzaliznytsia's tariff increase: business position

The Federation of Employers of Ukraine appealed to the Prime Minister Yulia Sviridenko with a demand not to increase freight tariffs in 2026. According to business estimates, the government's planned 37% tariff increase could lead to a reduction in GDP by almost UAH 100 billion. Experts point out that the industry is already operating 30-35% below the pre-war level, and freight tariffs more than doubled in 2021-2022.

According to the Federation, the main burden of the new tariffs will be borne by exporters, who are already suffering significant losses due to reduced production and lower transportation volumes. The appeal emphasises that further tariff increases will only deepen the crisis in the industry.

Why freight transport is not the problem

According to the Federation of Employers of Ukraine, Ukrzaliznytsia's key problem is not freight transportation, which remains profitable, but passenger transportation, which is causing the company UAH 25 billion in losses this year. Labour productivity in the company has also fallen by 19%, which affects the overall performance of the monopolist.

At the same time, freight transport remains the main source of income for Ukrzaliznytsia. However, according to business representatives, shifting the company's financial problems onto the shoulders of exporters is an unfair and inefficient step.

Possible consequences for the economy

Ukrzaliznytsia's freight traffic has already halved, indicating serious problems in the sector. If tariffs are increased, this will lead to an even greater reduction in freight traffic, which will negatively impact the company's revenues and the state budget.

According to the Federation of Employers of Ukraine, such changes may result in increased losses rather than additional profits for the state monopoly. The loss of almost UAH 100 billion of GDP will be a serious blow to Ukraine's economy, especially in a time of war and limited resources for industrial recovery.

Why it matters

The increase in Ukrzaliznytsia's freight tariffs affects not only the transport industry but the entire Ukrainian economy. Increased costs for exporters could reduce the competitiveness of Ukrainian goods on global markets and lead to job losses in the industry.

According to the Federation of Employers of Ukraine, the industry is already operating well below pre-war levels, and further tariff increases will only exacerbate negative trends. As a result, instead of the expected profits, the state risks even greater losses and a reduction in exports.

More information about the business position and possible consequences for the economy can be found on official website of the Federation of Employers of Ukraine.