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UK intel: Ukraine’s economy remains resilient two years into Russian invasion

Ukraine’s economy remains resilient after two years of Russia’s invasion, with around 3% growth projected for 2024, as per UK intelligence.
byYuri Zoria
16/05/2024
2 minute read
A production of Ukrainian drones by Ukrspecsystems which is located in Poland. Source: Ukrspecsystems
UK intel: Ukraine’s economy remains resilient two years into Russian invasion

British Defense Ministry’s intelligence update on Ukraine’s economy highlights its resilience despite two years of Russia’s invasion.

According to the update, Ukraine is likely to see real economic growth of around 3% in 2024, continuing the trend of wartime recovery after the economy contracted by around 29% in 2022. The International Monetary Fund (IMF) data shows Ukraine’s economy grew by 5% in 2023.

The Ministry wrote:

  • Ukraine’s economy remains resilient after two years of Russia’s invasion. Despite attacks by Russia on Ukraine’s energy infrastructure, it is likely that Ukraine will see real economic growth of around 3 per cent in 2024. This continues the trend of wartime recovery after Ukraine’s economy contracted by around 29 per cent in 2022, followed by real economic growth of 5 per cent in 2023, according to the International Monetary Fund (IMF).
  • The National Bank of Ukraine (NBU) improved the annual inflation forecast to 8.2 per cent for 2024, down from 8.6 per cent previously forecasted. Inflation in Ukraine fell to 3.2 per cent on an annualised basis in March 2024, reinforcing the trend of falling inflation levels from the peak of over 26 per cent in 2022. However, inflation is likely to rise in the second half of 2024. The NBU projects fading effects from last year’s strong harvest, a continued recovery in consumption, and rising costs for businesses during the war.
  • Continued improvements in the economic conditions of Ukraine have almost certainly allowed the NBU to progressively lower its base interest rate. The NBU lowered the base interest rate to 13.5 per cent at the end of April 2024, down from 14.5 per cent set in March 2024, and below the wartime peak of 2.5 per cent.

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