Economic review in September 2024. What is hindering the growth of Ukraine’s metallurgy sector?

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: Ukraine’s GDP increased by 3.7% in Q2 2024. Business expectations generally softened in September. Sentiment improved in trade and industry but deteriorated in construction and services.
• Monetary, FX, and Banking sector: Inflation accelerated to 8.6%, and key rate policy remained the same – 13%. International reserves declined and hryvnia stayed relatively stable. Household deposits and all loans in hryvnia resumed growth.
• Fiscal sector: Tax revenues of the state budget in September were UAH 117.9 bn, adding 26% y-o-y. In September, foreign funding expectedly dropped to almost zero for the second time since the start of the full-scale invasion. Ukraine received only $11 million in loans from the Council of Europe Development Bank.
• Sectoral analysis: Ukraine restores energy balance and prepares for the heating season. Electricity imports resumed in September and soon began to be larger than imports. Agricultural exports faced seasonal decline: grain and oilseeds exports decreased by 15% m-o-m to 3.9 mt. IT exports hit wartime low in August.
• Special topic: In September, Ukraine cut production of all major types of ferrous products. Steel production in Ukraine shrank 12% in September and reached 7m minimum. Global steel production reached 1.89 bn t in 2023, including 1.02 bn t in China. Other largest producers include India (141 mt), Japan (87 mt), United States (81 mt) and Russia (76 mt). Ukraine was ranked 24th with 6.2 mt.

Participants:

• Stanislav Zinchenko, CEO of GMK Center;
• Oleg Krykavsky, Director of Government Relations, ArcelorMittal Kryvyi Rih;
• Oleksandr Kalenkov, President of Ukrmetallurgprom;
• Natalia Sydoruk, GR Director of INTERPIPE;
• Yiğit Tahmisoğlu, analyst in the Energy and Climate Policy team at Berlin Economics.

Moderator: Maria Repko, Deputy Director of CES.

Media partner — GMK Center.