Economic review in March 2024. How can the Ukrainian economy withstand new energy attacks?

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:

• Special topic: Russia intensified attacks on energy infrastructure. The energy system of Ukraine now has a deficit of generation capacity. Ukraine needs nearly $5 bn to restore capacity of the united energy system.​
• Macroeconomic trends: GDP increased by 5.3% in 2023, but the growth only partially offset the 28.8%  GDP drop in 2022. Business expectations were  positive again in March — for the first time in half a year. ​
• Sectoral analysis: Steel production sets new wartime highs, with 611 kt produced in March 2024 — still 3 times lower than in March 2021. Exports of grain and oilseeds decreased as seasonality returns. IT exports remain on two-year low.​
• Monetary, FX, and Banking sector: Inflation slows down even further to 3.2% in March, and NBU decreased the key rate to 14.5%; NBU keeps the key rate high to support the appeal of hryvnia assets. International reserves increased thanks to large foreign aid, but hryvnia continued to devalue. ​
• Fiscal sector: In March, Ukraine received $8.9 bn of foreign financing, a highest-ever amount. The large inflows of foreign financing in March somewhat levelled out the negative situation that had been developing in the first quarter of the year. 

The recording of discussion is available via the link.

You can also access the visualization of monthly highlights through our regularly updated Ukraine War Economy Tracker.