KSE Institute analysts presented the second issue of the Ukrainian Recovery Digest for July 2023. The digest is devoted to the issues of budget policy, losses in the agricultural sector and infrastructure, and plans for Ukraine’s recovery and economic growth.

The document consists of five sections, in which experts analyze the current state of the economy, assess the extent of the damage caused by the Russian Federation, and suggest ways to restore Ukraine.

The “Public Finance” section analyzes budget expenditures and revenues for the first half of this year. As expected, the Ministry of Defense became the largest budget spender, accounting for 46% of all expenditures. The budget deficit of more than $30 billion was financed by grants, domestic loans, and external loans. The section also discusses the risks that may affect the further implementation of the state budget.

The section “Agricultural sector” is devoted to the assessment of losses of agricultural producers from the destruction of the Kakhovka dam and threats to agricultural exports from Russia’s withdrawal from the grain agreement and restrictions imposed by certain EU countries. This year’s harvest of grains and oilseeds is expected to fall by almost 6 million tons compared to 2022.

The section “Damages” presents the latest estimates by the “Russia Will Pay” project team of Ukraine’s material losses from Russian aggression. Experts estimate the direct damage caused to public and private infrastructure sectors at $150.5 billion.

“Recovery”. This section presents the vision of macroeconomic architecture of Ukraine’s post-war recovery, including thepreparation of the Ukraine Plan, as a part of a support package from EU,  which envisages €50 billionsupport until 2027. Additionally, world-class scholars have offered visions of comprehensive changes in fiscal and monetary policies, the labor market, and the regulatory environment.

“Sanctions”. This section is devoted to the creation of international mechanisms for collecting compensation from Russia for the damage caused by the war. Ukraine can claim about $318 billion of state and more than $58 billion of private Russian assets blocked in the United States, Canada, and European countries.

The full version of the second issue of the Ukrainian Recovery Digest is available here

The Digest was prepared with the support of the European Union and includes the results of research conducted by the Kyiv School of Economics, which was made possible by the support of the UK Government (UK Aid), the United States Agency for International Development (USAID), the International Renaissance Foundation and the World Bank.