Economic review in November 2024. Ukraine’s budget for 2025: Army, Taxes, Russian assets
Research
| 12 December 2024
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.
Key changes in the Ukrainian economy in November:
- Macroeconomic trends: In January-November 2024, Ukraine’s GDP increased by 4% y-o-y according to the Ministry of Economy. GDP growth by the end of 2024 will likely be higher than 4.0% as forecasted by the NBU. Business expectations worsened in November in all surveyed sectors. The most negative impact was caused by the increased intensity of hostilities and the resumption of power outages.
- Fiscal sector: In November, there were record state budget revenues, but consumption taxes growth stopped. Ukraine received $6.5 bn of foreign budgetary assistance.
- Monetary, FX, and Banking sector: Inflation accelerated to 11.2% and key rate was increased to 13.5% on 12 December. International reserves increased to $39.9 bn, and hryvnia remained relatively stable. In the banking sector, there was a strong growth in UAH deposits and retail loans amid stable FX trends. NBU approved Concept of 2025 resilience assessment of banks and banking system.
- Sectoral analysis: Ukraine faces power shortages due to Russian attacks and bad weather. The share of seaports in agri exports reached 86%, a new wartime high. Steel production in Ukraine declined for the sixth month in a row. IT exports rebounded in autumn after reaching a wartime low in August.
- Special topic: Budget 2025 is the fourth war budget. Expenditures are much larger than revenues. Revenues increase but are still not enough to cover all the needs. Financing assistance will cover the budget gap in 2025.
See our report for further details. The panelists were:
- Sergii Marchenko, Minister of Finance of Ukraine;
- Olena Bilan, Chief Economist at Dragon Capital;
- Andriy Moskalenko, First Deputy Mayor of Lviv.
Moderator: Hlib Vyshlinsky, Executive Director of CES.
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