According to the IER’s operational assessment, Ukraine demonstrated moderate economic growth of 3.8% in 2024. The IER also predicts that real GDP growth in 2025 will be about 3%.
Access to the Ukrainian Sea Corridor drove growth in metallurgy and iron ore production. Agricultural companies also continued to export their products by sea and rail. In fact, better logistics than in 2023 contributed to a slight increase in merchandise exports.
Thus, according to preliminary figures announced by government officials, exports grew by 15% in 2024, and imports by 8%, but imports remained significantly higher than exports due to the effects of the war with Russia.
Defense orders continued to support the development of machine building and light industry. Rapid wage growth due to labor shortages and further social payments and pension indexation, partially financed by international assistance, contributed to a tangible recovery in trade.
In addition, despite higher inflation (11% in November compared to the previous year) and the depreciation of the hryvnia from 38 UAH to 42 UAH per dollar, the NBU made efforts to continue its policy of macroeconomic stability and increased its international reserves to over $43 billion.
At the same time, uncertainty remained high throughout the year, which limited corporate investment. Thus, according to the IER surveys, the main obstacles to companies’ operations in 2024 were:
- insecurity at work;
- lack of labor force;
- problems with access to electricity.
For example, Russian shelling of energy infrastructure created a power shortage that affected businesses and households. However, this has stimulated the development of a distributed generation network, with 835 MW of such facilities already connected over the year.
As expected by the IER experts, the government and international donors’ efforts to ensure military risks and provide guarantees will be more effective in 2025. At the same time, more investment financing will be available under the second component of UkraineFacility.
