KSE Institute has released a new quarterly analytical product – the Ukraine Risk Matrix – which provides a comprehensive assessment of the key risks facing Ukraine’s economy and overall resilience amid the full-scale war as of Q1 2026. The study covers 12 major risks across four dimensions – real economy, macro-financial stability, external stability, and domestic stability – assessing both their likelihood and potential impact in the short and long term.

The first edition of the risk matrix shows that, following intensified Russian strikes on critical infrastructure over the winter, Ukraine’s risk landscape has deteriorated. The energy sector remains the most binding constraint on economic activity and overall stability, directly affecting production, fiscal revenues, inflationary pressures, and exchange rate dynamics. In the near term, energy constraints will define the limits of economic growth.

At the same time, external risks are increasing. Ukraine remains highly dependent on international financial support, and any delays in or uncertainty surrounding disbursements can quickly translate into macroeconomic pressure. Additional risks stem from developments in the Middle East, including rising energy prices and the potential diversion of Western military and political resources.

Multiple risks are structural and will persist beyond the war. These include the loss of human capital, suppressed private investment, and limited absorption capacity, high budget spending on defense and social support, external imbalances, and a growing debt burden. 

Each risk in the report is assessed separately over the short and long term and assigned a composite expert judgement score from 1 to 5, reflecting its overall materiality as a combination of likelihood and potential impact. This is not a point forecast, but a comparative framework highlighting where pressures are currently most acute and which risks are likely to shape Ukraine’s trajectory in the short and long term.

In the real economy, the risks are “Economic activity” (4/5), “Recovery & investment” (3/5), and “Critical infrastructure” (4/5). Russian attacks on energy infrastructure are the single most binding constraint on Ukraine’s economy: driving up costs, limiting production, and straining business models already squeezed by labor shortages and logistics pressures. 

In macro-financial stability, the risks are “Fiscal position & budget execution” (4/5), “Inflation & monetary stability” (3/5), and “Banking & financial stability” (3/5). Ukraine’s fiscal deficit is locked at wartime levels, with defense and social obligations that will persist well beyond active hostilities — and rising debt service already crowding out other priorities. Monetary stability holds for now, but energy-driven inflation, exchange rate pressure, and dollarization are eroding the NBU’s room to maneuver. 

In external stability, the risks are “External financing & donor flows” (3/5), “Trade & external dynamics” (4/5), and “Geopolitical risks & war” (5/5). The war remains the most important factor determining the overall risk environment. But other external risks are intensifying as well, with macroeconomic stability closely tied to timely external support as the trade deficit becomes increasingly structural, yet political friction in the EU and unmet reform benchmarks create disbursement risks.

In domestic stability, the report assesses “Reform momentum” (3/5), “Social stability” (3/5), and “Political stability” (2/5). Reform delivery is increasingly uneven — missed IMF and Ukraine Facility benchmarks are creating a backlog that risks both donor flows and EU accession. Social pressures are rising due to demographic challenges and veteran reintegration, while growing parliamentary fragmentation makes decision-making more reliant on ad hoc coalitions and executive action.