Analysts assessed the current state of the Ukrainian economy based on September results.

❗️Key findings:

Real GDP in the second quarter of 2025 grew by 0.7% year-on-year, according to updated data, influenced by the war and structural problems. Growth was mainly driven by consumption–boosted by wage growth–and investment. The extractive industry is stagnating due to military action, while the manufacturing industry is recovering, supported by the production of military goods 📈

The trade deficit rose to $30.4 billion in January-August due to subdued 📊 exports and rapid import growth in all key sectors. Imports were particularly affected by increased defense spending, capital investment, and infrastructure reconstruction.

The state budget deficit from January to September reached UAH 0.9 trillion ($22.1 billion). Revenues reached 80.0% of the annual plan, while spending reached 72.1%. At the same time, war-related expenses 🪖 increased by 31.8% y-o-y. State and state-guaranteed debt at the end of September amounted to UAH 8 trillion.

Inflation fell to 11.9% in September, compared to 13.2% in August, continuing the gradual decline of inflation since June 2025 📉 But inflation risks are still high because of rising government spending and possible attacks on the energy sector in winter.

The hryvnia depreciated to 41.3 UAH per dollar in September according to the official exchange rate. The real exchange rate, however, rose more due to high inflation. Households expect that the dollar will cost around 43.8 UAH by the end of the year 🪙

❗️Key factors that will affect the economy in the near future:

Due to attacks on the energy system, about 60% of gas production has been shut down 💥 The damage will negatively affect exporters, while imports will increase and worsen the trade balance.

The decision on a €140 billion reparations loan will be a turning point for financing needs, particularly military ones. These funds are currently the subject of lively debate 📢

The International Monetary Fund 🏦urges the National Bank of Ukraine to carry out a controlled devaluation of the hryvnia. But the NBU suggests that this will cause rising inflation and concern among Ukrainians about economic stability.

More detailed overview of key indicators and factors – in the KSE Institute’s October 2025 Ukraine Monthly Economic Update by the link 🔗: https://shorturl.at/i6H7C