Ukraine War Economy Tracker with interactive charts and experts’ comments made by one of the best think-tanks in the country. We update the tracker regularly.
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- Job market
- Business and consumers expectations
- Foreign financial aid
- Fiscal policy
- Foreign trade
- Energy sector
- Metallurgy
- Agriculture
- Monetary policy and inflation
- Banking sector
- GDP
Job market
Text updated on 13 December 2024
Ukraine’s labour market expiriences all the challenges of a full-scale war. The economic shock of the beginning of the Russian invasion led to a drop in both demand and supply of labour. Businesses stopped hiring and people stopped applying for jobs. Later, demand for labour began to recover slowly. The number of people looking for a new job soared in the summer of 2022 and exceeded the average for 2021. However, the trends diverged from there: the need for labour was recovering along with the economic recovery, while the activity of job seekers was declining, not least due to Ukrainians’ migration abroad and mobilisation into the Defence Forces.
In November, the number of new vacancies held steady for several weeks, but began to decline at the end of the month. The traditional decline in labour market activity can be expected with the start of the Christmas holidays. The activity of job seekers remains at a consistently low level, which is mostly lower than in 2023 and 2022.
The State Statistics Service of Ukraine stopped publishing unemployment data when the full-scale war started. The Info Sapiens research agency makes its own estimates of the unemployment rate. According to them in November 2024, the unemployment rate in Ukraine was 15.1%. The proxy indicator of poverty — the proportion of people surveyed who have to save on food — decreased to 19.8%.
Business and consumers expectations
Text updated on 13 December 2024
In November, the NBU’s business activity expectations index decreased to 47.2, down from 49.4 in October. and remained below the neutral level of 50 points. This means that negative sentiment prevail among all surveyed businesses; sentiment worsened in all surveyed sectors. The most negative impact was caused by the increased intensity of hostilities and the resumption of power outages. The further dynamics of business sentiment is likely to depend on changes in the energy supply situation. Changes in business expectations are an important subjective indicator of the state of the economy. They indicate a gradual recovery in the economic activity or, conversely, a deterioration in the situation.
In November 2024, the Info Sapiens Consumer Confidence Index was 70.8 points, a slight improvement compared to October. An index of less than 100 means that negative consumer sentiment prevails among citizens. Components of the Consumer Confidence Index are Index of Economic Expectations (82.8 in November) and Index of Current Situation (52.8 in November). At the beginning of the full-scale war, consumer sentiment soared despite the deterioration in the real economic situation of consumers: Ukrainians had very optimistic expectations about the future. However, this ‘corridor’ of optimism is gradually narrowing, and the situation is slowly returning to pre-war levels.
Foreign financial aid
Text updated on 13 December 2024
Since the beginning of the full-scale invasion, all of Ukraine’s own state budget revenues have been used to finance defence, accounting for approximately half of the state budget. All civilian expenditures of the state budget are financed by foreign financial assistance – in 2024, the need for such external financing is $38 billion.
In November, foreign budgetary assistance fully covered the budget deficit and debt repayment needs. Ukraine received $4.8 bn loan from the World Bank, $1.35 grant from the U.S., $235 m loan from Japan, $100 m loan from South Korea (for the first time during the full-scale war), and EUR 10.8 grant from Norway.
Foreign aid covered 68% of the additional needs of the state budget in 11 months of 2024. While foreign financing was not enough to fully cover the financing needs, this was expected. Domestic bonds are the main source of covering the gap.
Fiscal policy
Text updated on 13 December 2024
November tax revenues of the state budget reached UAH 158.2 bn, adding 38.5% y-o-y. The consumption taxes grew by 41% vs November 2023, but the 4-month growth trend has paused.
We observe significant growth of VAT refunds throughout the year, with the last two monthly refunds exceeding UAH 15 bn (+50% y-o-y). Another concern is the continued underperformance of the Customs Service’s revenue plan (87% in October and 79% in November).
The president signed the tax increase package. MPs introduced amendments to the Tax Code that would shift the enactment date of the military tax for PEs to 1 January 2025.
N.B.: We have changed the methodology for calculating state budget expenditures by separating military assistance from foreign partners into a separate category. ‘In-kind military support’ is the expenditures from material military aid that are accounted for as revenues of budgetary institutions. Such military aid may be reflected in the budget indicators with a delay and/or in an incomplete amount. We have also split the ‘Public order and safety’ category, separating ‘Security’ (Ministry of Internal Affairs and Security Service of Ukraine expenditures) and moving remaining civilian items to the ‘Other expenditures’ category. We have also added a 3-month rolling average for the total expenditures to make it easier to observe the dynamics.
State budget expenses not including in-kind military support reached UAH 2,977 bn for 9m 2024, adding just 5.4% y-o-y. Defence and security expenses reached UAH 1,475 bn for 9m 2024, with September expenses of UAH 166.7 bn remaining level for the 4th consecutive month. Debt service expenses in September were low at just UAH 13 bn.
Foreign trade
Text updated on 4 November 2024
According to preliminary data from the NBU, in September 2024 the balance of goods and services was negative: $-3.2 bn. In September, imports of goods ($5.7 bn) exceeded exports of goods ($3 bn), while imports of services ($1.4 bn) exceeded exports of services ($1.9 bn).
Energy sector
Text updated on 13 December 2024
Scheduled electricity supply restrictions for residential and commercial consumers because of the Russian attacks continue in Ukraine in accordance with the approved schedules.
Since the beginning of December, DTEK has restored electricity supply to 23 000 consumers in 25 localities affected by Russian attacks. Most of them are in Dnipropetrovsk oblast (12 900), as well as in Donetsk and Kyiv oblasts.
Weather conditions are another cause of damage to power lines in addition to Russian attacks. As of 10 December, 66 settlements in four regions — Chernivtsi, Odesa, Dnipro, and Mykolaiv — were without power due to rain, wind, and snow.
There are no commercial electricity exports.
In November, net electricity exports were recorded for 5 days, the last time on November 17. Since the beginning of December, Ukraine has not commercially exported electricity.
Net electricity imports unchanged in November at 121 GWh. This is a result of commercial imports of 163 GWh and commercial exports of 42 GWh.
Metallurgy
Text updated on 13 December 2024
Steel production declined for the sixth month in a row in November, down 10% to 541 kt. Pig iron production fell by 13% to 556 kt. At the same time, rolled steel production increased by 8% to 477 kt. In 11m2024, production of the main types of steel products increased by 18-23%, with 6.52 mt of pig iron. 7.03 mt of steel and 5.74 mt of rolled products produced.
In January-October 2024, Ukraine exported 1.67 mt of semi-finished steel products (+62% y-o-y) for a total of $828 mln. Half of the exports went to Bulgaria and Egypt.
Metinvest and the Italian government signed a declaration on the construction of a steel plant in Piombino. The construction cost is estimated at €2.5 bn, with a planned capacity of 2.7 mt of hot-rolled coils per year.
Agriculture
Text updated on 13 December 2024
In November, grain and oilseeds exports declined by 5% m-o-m to 4.9 mt. In 11M2024, these agri exports reached 57.4 mt, 27% up y-o-y. The share of seaports in grain exports reached 86%, a record high since the beginning of the full-scale Russian invasion.
Ukrainian grain exports in 2024/2025 reached 18.9 mt as of 6 December, up 37% y-o-y. The most important export crops are wheat (9.1 mt), corn (7.6 mt), and barley (1.9 mt).
In November, another 25 000 ha were cleared of mines, bringing the total to over 255 000 ha since the beginning of the year. In total, 69 demining operators have been certified in Ukraine, and 58 more are in the process of certification.
Monetary policy and inflation
Text updated on 13 December 2024
Ukraine entered a full-scale war with consumer inflation of 10% year-on-year (y-o-y). For example, in February 2022, prices for consumer goods and services were 10% higher than in February 2021. The Russian invasion caused a significant acceleration in inflation, which peaked in October 2022 at 26.6% y-o-y. The reasons for this were the direct consequences of the war: the destruction of production facilities, disruption of supply chains, and higher production costs for businesses. The NBU’s hryvnia printing to cover the budget deficit also put additional pressure on inflation: in 2022, the NBU printed UAH 400 billion ($12.5 billion) to buy government war bonds.
At the end of 2022 and throughout 2023, inflation was brought under control thanks to the stabilisation of the economic situation, the NBU’s competent actions, and the refusal to finance the budget by printing hryvnia. The deceleration in inflation was also driven by the record-high harvest in 2023.
However, in 2024, inflation began to accelerate again: the NBU cited the exhaustion of the impact of last year’s significant harvests, electricity shortages and labour shortages, and the summer drought of 2024 as the main reasons.
In November 2024, inflation accelerated to 11.2% y-o-y — +1.9% m-o-m — due to stronger-than-expected impact of adverse weather conditions on crops, higher costs of raw-food inputs, and further growth in business costs of power and labour.
On 12 December, NBU decided to raise the key policy rate to 13.5% to maintain the stability of the FX market, keep the inflation expectations under control, and gradually slow it to the target of 5%.
This increase in the key policy rate will support the real yield of hryvnia instruments and help reduce pressure on the exchange rate and prices.
The yield of hryvnia instruments – both government bonds and deposits – remains higher in real terms than forecasted inflation.
In November, international reserves grew by 9.1% to $39.9 bn (5.0 months of import coverage) due to large inflows from international partners (mostly from the World Bank and the US) and decreased net FX sales.
Hryvnia slowly and moderately depreciated at the end of November, from 41.3 to 41.6 UAH/$ after several months of stability. The NBU reduced FX interventions to $2.7 bn. Gradual FX liberalisation and stricter compliance measures ensured market stability.
Banking sector
Text updated on 13 December 2024
In October 2024, UAH on-demand deposits showed notable growth, while FX on-demand deposits increased at a slower pace. UAH term deposits continued to grow steadily whereas FX term deposits remained stable. The data highlights stronger growth in UAH deposits especially in on-demand accounts compared to FX deposits.
In October 2024, UAH retail loans grew while UAH corporate loans declined after the increase within the last year. FX corporate loans remained stable and FX retail loans stagnated at low levels. This highlights robust growth in UAH retail loans versus subdued FX loan performance.
GDP
Text updated on 13 December 2024
In January-November 2024, Ukraine’s GDP increased by 4% y-o-y according to the Ministry of Economy. In November, the economy grew by 0.9% year-on-year. GDP growth by the end of 2024 will likely be higher than 4.0% as forecasted by the NBU. Growth drivers are still transport and construction, manufacturing, and domestic trade. Lower-than-expected electricity shortages and slightly higher harvests of early grain crops contribute to better GDP recovery.