Economic Monitor Ukraine
The Ukrainian economy will continue to grow, but at a slower pace: 5.3% in 2023, 3.6% in 2024 and 3.4% in 2025. Consumption and investment are driving growth, but are being held back by damage to energy infrastructure and military mobilisation. Inflation is rising and the current account deficit is widening. The fiscal situation remains tight, with high public debt and insufficient international aid. The energy sector is severely damaged, leading to supply shortages and possible blackouts.
WA 20 | September 2024
Overview
- Ukraine continues on its growth path, but growth slows down to 5.3% yoy in 2023, 3.6% in 2024, 3.4% in 2025
- Consumption and investment drive growth, with energy damages and mobilization acting as brakes
- Rising inflation exceeds the target rate, monetary policy remains restrictive
- Growing current account deficit (2024: -5.9%) caused by an increasing trade balance deficit
- Controlled depreciation with increased reserve levels (Aug-24: USD 42 bn)
- Financing the budget deficit for 2024 and 2025 remains challenging. Previously committed financial aid is insufficient
- Public debt remains high, despite successful debt restructuring
- New corridor over the Black Sea positive for exports, but imports continue to grow stronger
Special issues
- Situation in the energy sector: Severe damages at all levels lead to supply bottlenecks – power shutdowns as a consequence. The situation before winter remains extremely tense
- Target groups for investments from Germany: Focus on companies with Ukraine experience. Identification of actionable recommendations
