Economic review in July 2024. How much money does Ukraine lack?

Since March 2022, the Centre for Economic Strategy (CES), together with the German Economic Team (GET), has been preparing monthly reviews of Ukraine’s economy during a full-scale war.  All notes can be found under the link.

Executive summary:

• Macroeconomic trends: The NBU upgraded its forecast for GDP growth in 2024 to 3.7%. Business expectations slightly improved, but negativity still prevailed among businesses in all sectors surveyed. Power outages remained a challenge for all industries, but businesses are gradually adapting to the situation.
• Sectoral analysis: Electricity deficit remained high in July. Iron & steel production moderately declined for the second month in a row, and the agri exports remained slightly over 4 mt in July. IT industry slowly deflated amid global cooling in the sector.
• Monetary, FX, and Banking sector: Inflation accelerated to 5.4%, and key rate policy remained the same – 13%. International reserves declined, and hryvnia set a new anti-record of its value to USD. Household deposits on demand continue to rise alongside UAH corporate and retail loans.
• Fiscal sector & Special topic: Ukraine received $2.2 bn of foreign budget assistance in July. Foreign aid has been less regular in 2024 than in the previous years and covers fewer needs. Foreign financial assistance for 2025 is uncertain. Defence spending in the first half of the year limited by own revenues, with military support decreased. Taxes on consumption rebound in July after 2 month’s decrease.

 Participants:

• Gavin Gray, the IMF mission chief for Ukraine.
• Olena Bilan, Director of the analytical department at Dragon Capital and member of the CES Supervisory Board.
• Olga Zykova, Deputy Minister of Finance of Ukraine.
• Volodymyr Tsabal, Secretary of the Budget Committee of the Verkhovna Rada of Ukraine.

Moderator: Hlib Vyshlinsky, Executive Director of CES.