Economic review in October 2024. How close are we to the EU? Overview of economic reforms over the past year

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.

• Macroeconomic trends: Ukraine’s GDP is forecasted to increase by 4.0% in 2024 according to the latest NBU forecast published in the Inflation Report — up from 3.7% in the previous forecast. Business expectations improved in October. Sentiment improved in the services sector but deteriorated in all other surveyed sectors.
• Fiscal sector: Tax revenues growth trend continued in October. State defence spending stayed level and foreign military support increased. Ukraine has received more than $100 bn of foreign financing since 24 February 2022.
• Monetary, FX, and Banking sector: Inflation accelerated to 9.7%, and key rate policy remained the same – 13%. International reserves declined, but hryvnia stayed relatively stable. Household deposits on demand and hryvnia loans continued to demonstrate growth.
• Sectoral analysis: Ukraine starts the heating season by reducing electricity imports. High season for Ukrainian agri exports started in October, and grain and oilseeds exports expectedly increased by 32%. Steel production on 8-month low but still higher than in 2023. IT exports slightly rebounded after a wartime low and stayed over $500m per month.
• Special topic: European integration of Ukraine. According to Ukraine Enlargement report, Ukraine made limited progress in 2024. Ukraine has implemented numerous economic reforms, which have a profound effect on economic resilience. Ukraine’s accession negotiations have begun with the Fundamentals and will conclude with the Fundamentals.